Need To Know: Analysts Are Much More Bullish On New Hope Corporation Limited (ASX:NHC) Revenues

New Hope Corporation Limited (ASX:NHC) 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 New Hope will make substantially more sales than they'd previously expected.

Following the upgrade, the latest consensus from New Hope's five analysts is for revenues of AU$1.9b in 2022, which would reflect a substantial 82% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of AU$1.6b in 2022. The consensus has definitely become more optimistic, showing a nice increase in revenue forecasts.

View our latest analysis for New Hope

Additionally, the consensus price target for New Hope increased 12% to AU$2.86, showing a clear increase in optimism from the analysts involved. 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 New Hope, with the most bullish analyst valuing it at AU$3.05 and the most bearish at AU$2.40 per share. This is a very narrow spread of estimates, implying either that New Hope is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that New Hope's rate of growth is expected to accelerate meaningfully, with the forecast 82% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 8.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that New Hope is expected to grow much faster than its industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for New Hope this year. They're also forecasting more rapid revenue growth 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. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at New Hope.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on New Hope that suggests the company could be somewhat undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

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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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.