Shareholders in BYD Electronic (International) Company Limited (HKG:285) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.
After the upgrade, the 14 analysts covering BYD Electronic (International) are now predicting revenues of CN¥77b in 2020. If met, this would reflect a huge 46% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 202% to CN¥2.14. Before this latest update, the analysts had been forecasting revenues of CN¥64b and earnings per share (EPS) of CN¥0.89 in 2020. 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 24% to CN¥15.92 per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on BYD Electronic (International), with the most bullish analyst valuing it at CN¥22.42 and the most bearish at CN¥7.23 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.
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 BYD Electronic (International)'sgrowth to accelerate, with the forecast 46% growth ranking favourably alongside historical growth of 15% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that BYD Electronic (International) is expected to grow much faster than its 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 this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are 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, BYD Electronic (International) could be worth investigating further.
Analysts are definitely bullish on BYD Electronic (International), but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 2 other flags we've identified .
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.
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