Simply wallstreet:
Dec 09
Consensus forecasts updated
The consensus outlook for 2021 has been updated.
2021 revenue forecast increased from US$5.86b to US$6.14b.
EPS estimate fell from US$4.08 to US$3.60 per share.???????????????
Net income forecast to grow 238% next year vs 15% growth forecast for Chemicals industry in the Netherlands.
Consensus price target up from €28.72 to €30.07.
Share price was steady at €23.80 over the past week.
Celebrations may be in order for OCI N.V. (AMS:OCI) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.
After this upgrade, OCI's eight analysts are now forecasting revenues of US$6.0b in 2022. This would be a decent 15% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 206% to US$3.19. Before this latest update, the analysts had been forecasting revenues of US$5.3b and earnings per share (EPS) of US$2.53 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
See our latest analysis for OCI
earnings-and-revenue-growth
ENXTAM:OCI Earnings and Revenue Growth December 9th 2021
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$33.81, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. Currently, the most bullish analyst values OCI at US$36.08 per share, while the most bearish prices it at US$26.10. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting OCI is an easy business to forecast or the underlying assumptions are obvious.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the OCI's past performance and to peers in the same industry. It's pretty clear that there is an expectation that OCI's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.7% annually. Even after the forecast slowdown in growth, it seems obvious that OCI is also expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to next year's earnings expectations, it might be time to take another look at OCI.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple OCI analysts - going out to 2023, 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 that insiders are buying.