Stock Analysis

New Forecasts: Here's What Analysts Think The Future Holds For Australian Clinical Labs Limited (ASX:ACL)

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Celebrations may be in order for Australian Clinical Labs Limited (ASX:ACL) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. Australian Clinical Labs has also found favour with investors, with the stock up an impressive 16% to AU$5.65 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the current consensus from Australian Clinical Labs' three analysts is for revenues of AU$925m in 2022 which - if met - would reflect a major 43% increase on its sales over the past 12 months. Per-share earnings are expected to soar 200% to AU$0.90. Previously, the analysts had been modelling revenues of AU$839m and earnings per share (EPS) of AU$0.61 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Australian Clinical Labs

ASX:ACL Earnings and Revenue Growth December 22nd 2021

It will come as no surprise to learn that the analysts have increased their price target for Australian Clinical Labs 5.5% to AU$5.77 on the back of these upgrades. 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 Australian Clinical Labs, with the most bullish analyst valuing it at AU$6.60 and the most bearish at AU$5.20 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Australian Clinical Labs' past performance and to peers in the same industry. The analysts are definitely expecting Australian Clinical Labs' growth to accelerate, with the forecast 43% annualised growth to the end of 2022 ranking favourably alongside historical growth of 16% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Australian Clinical Labs to grow 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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Australian Clinical Labs.

Analysts are clearly in love with Australian Clinical Labs at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as a weak balance sheet. You can learn more, and discover the 2 other concerns we've identified, for free on our platform here.

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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