Today is shaping up negative for Newpark Resources, Inc. (NYSE:NR) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the consensus from Newpark Resources' dual analysts is for revenues of US$464m in 2024, which would reflect a disturbing 35% decline in sales compared to the last year of performance. Statutory earnings per share are presumed to leap 25% to US$0.33. Before this latest update, the analysts had been forecasting revenues of US$698m and earnings per share (EPS) of US$0.34 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a pretty serious reduction to revenue estimates and a small dip in earnings per share numbers as well.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 58% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 1.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.9% per year. It's pretty clear that Newpark Resources' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Newpark Resources going forwards.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Newpark Resources going out as far as 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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