Anglo Pacific Group plc (LON:APF) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. The market seems to be pricing in some improvement in the business too, with the stock up 5.4% over the past week, closing at UK£1.52. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.
After this upgrade, Anglo Pacific Group's four analysts are now forecasting revenues of US$174m in 2022. This would be a substantial 104% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 167% to US$0.47. Before this latest update, the analysts had been forecasting revenues of US$147m and earnings per share (EPS) of US$0.35 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 8.9% to UK£2.51 per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Anglo Pacific Group, with the most bullish analyst valuing it at UK£3.00 and the most bearish at UK£1.75 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Anglo Pacific Group's growth to accelerate, with the forecast 104% annualised growth to the end of 2022 ranking favourably alongside historical growth of 8.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 3.2% annually. It seems obvious that as part of the brighter growth outlook, Anglo Pacific Group is expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Anglo Pacific Group could be worth investigating further.
Analysts are definitely bullish on Anglo Pacific Group, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 2 other concerns we've identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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