One thing we could say about the analysts on Polaris Inc. (NYSE:PII) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the 18 analysts covering Polaris provided consensus estimates of US$7.3b revenue in 2024, which would reflect a definite 12% decline on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$8.3b in 2024. The consensus view seems to have become more pessimistic on Polaris, noting the measurable cut to revenue estimates in this update.

Notably, the analysts have cut their price target 8.5% to US$88.07, suggesting concerns around Polaris' valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 23% by the end of 2024. This indicates a significant reduction from annual growth of 7.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Polaris is expected to lag the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Polaris this year. They're also anticipating slower revenue growth than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Polaris' future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Polaris after today.

Unfortunately, the earnings downgrade - if accurate - may also place pressure on Polaris' mountain of debt, which could lead to some belt tightening for shareholders. See why we're concerned about Polaris' balance sheet by visiting our risks dashboard for free on our platform here.

You can also see our analysis of Polaris' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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