Industry Analysts Just Upgraded Their Whitehaven Coal Limited (ASX:WHC) Revenue Forecasts By 14%

Celebrations may be in order for Whitehaven Coal Limited (ASX:WHC) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

After this upgrade, Whitehaven Coal's ten analysts are now forecasting revenues of AU$3.7b in 2022. This would be a substantial 61% improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting AU$1.03 in per-share earnings. Prior to this update, the analysts had been forecasting revenues of AU$3.3b and earnings per share (EPS) of AU$0.96 in 2022. The forecasts seem more optimistic now, with a decent improvement in revenue and a modest lift to earnings per share estimates.

See our latest analysis for Whitehaven Coal

With these upgrades, we're not surprised to see that the analysts have lifted their price target 13% to AU$4.59 per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Whitehaven Coal at AU$8.00 per share, while the most bearish prices it at AU$3.60. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. 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. Not only are Whitehaven Coal's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider 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. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. 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.

Analysts are clearly in love with Whitehaven Coal at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as 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.

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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.