The Pacific Current Group Limited (ASX:PAC) Analyst Just Boosted Their Forecasts By A Dazzling Amount

Pacific Current Group Limited (ASX:PAC) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance.

Following the upgrade, the most recent consensus for Pacific Current Group from its sole analyst is for revenues of AU$66m in 2021 which, if met, would be a decent 12% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 755% to AU$0.51. Previously, the analyst had been modelling revenues of AU$51m and earnings per share (EPS) of AU$0.43 in 2021. 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.

Check out our latest analysis for Pacific Current Group

Despite these upgrades, the consensus price target fell 10% to AU$6.70, perhaps signalling that the uplift in performance is not expected to last.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Pacific Current Group's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2021 being well below the historical 19% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.7% annually. Even after the forecast slowdown in growth, it seems obvious that Pacific Current Group is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. A lower price target is not intuitively what we would expect from a company whose business prospects are improving - at least judging by these forecasts - but if the underlying fundamentals are strong, Pacific Current Group could be one for the watch list.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

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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