The analysts covering F&G Annuities & Life, Inc. (NYSE:FG) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, F&G Annuities & Life's twin analysts currently expect revenues in 2024 to be US$5.2b, approximately in line with the last 12 months. Per-share earnings are expected to bounce 75% to US$4.39. Before this latest update, the analysts had been forecasting revenues of US$5.8b and earnings per share (EPS) of US$4.52 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a minor downgrade to earnings per share numbers as well.

Despite the cuts to forecast earnings, there was no real change to the US$41.50 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

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 0.8% by the end of 2024. This indicates a significant reduction from annual growth of 23% 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 5.2% per year. It's pretty clear that F&G Annuities & Life's 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. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on F&G Annuities & Life after today.

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 F&G Annuities & Life going out as far as 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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