One thing we could say about the analysts on Starwood Property Trust, Inc. (NYSE:STWD) - 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.

After the downgrade, the six analysts covering Starwood Property Trust are now predicting revenues of US$1.6b in 2025. If met, this would reflect a major 270% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 42% to US$1.56. Before this latest update, the analysts had been forecasting revenues of US$2.0b and earnings per share (EPS) of US$1.57 in 2025. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a sizeable cut to revenues and some minor tweaks to earnings numbers.

See our latest analysis for Starwood Property Trust

The consensus has reconfirmed its price target of US$22.38, showing that the analysts don't expect weaker sales expectationsnext year to have a material impact on Starwood Property Trust's market value.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Starwood Property Trust is forecast to grow faster in the future than it has in the past, with revenues expected to display 185% annualised growth until the end of 2025. If achieved, this would be a much better result than the 11% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 24% annually. Not only are Starwood Property Trust's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better 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 Starwood Property Trust after today.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Starwood Property Trust, including the risk of cutting its dividend. Learn more, and discover the 2 other warning signs we've identified, for 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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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.