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Analysts' Revenue Estimates For Whitehaven Coal Limited (ASX:WHC) Are Surging Higher

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Whitehaven Coal Limited (ASX:WHC) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Whitehaven Coal will make substantially more sales than they'd previously expected.

Following the upgrade, the current consensus from Whitehaven Coal's ten analysts is for revenues of AU$3.7b in 2022 which - if met - would reflect a huge 61% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting AU$1.03 in per-share earnings. Previously, the analysts had been modelling revenues of AU$3.3b and earnings per share (EPS) of AU$0.96 in 2022. The most recent forecasts are noticeably more optimistic, with a nice gain to revenue estimates and a lift to earnings per share as well.

See our latest analysis for Whitehaven Coal

earnings-and-revenue-growth
earnings-and-revenue-growth

It will come as no surprise to learn that the analysts have increased their price target for Whitehaven Coal 13% to AU$4.59 on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Whitehaven Coal, with the most bullish analyst valuing it at AU$8.00 and the most bearish at AU$3.60 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Whitehaven Coal's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Whitehaven Coal is forecast to grow faster in the future than it has in the past, with revenues expected to display 158% annualised growth until the end of 2022. If achieved, this would be a much better result than the 0.7% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 5.6% per year. So it looks like Whitehaven Coal is expected to grow faster than its competitors, at least for a while.

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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Whitehaven Coal.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential concern with Whitehaven Coal, including the risk of cutting its dividend. For more information, you can click through to our platform to learn more about this and the 1 other concern 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.