Bullish: Analysts Just Made An Incredible Upgrade To Their SunCoke Energy, Inc. (NYSE:SXC) Forecasts
SunCoke Energy, Inc. (NYSE:SXC) 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.
After this upgrade, SunCoke Energy's twin analysts are now forecasting revenues of US$1.8b in 2022. This would be a decent 15% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 39% to US$0.94. Prior to this update, the analysts had been forecasting revenues of US$1.5b and earnings per share (EPS) of US$0.68 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
Check out our latest analysis for SunCoke Energy
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$10.50, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on SunCoke Energy, with the most bullish analyst valuing it at US$11.00 and the most bearish at US$10.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting SunCoke Energy is an easy business to forecast or the underlying assumptions are obvious.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting SunCoke Energy's growth to accelerate, with the forecast 21% annualised growth to the end of 2022 ranking favourably alongside historical growth of 2.0% 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 2.3% annually. So it's clear with the acceleration in growth, SunCoke Energy is expected to grow meaningfully 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. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at SunCoke Energy.
Analysts are definitely bullish on SunCoke Energy, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including a weak balance sheet. For more information, you can click through to our platform to learn more about this and the 3 other warning signs we've identified .
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.
