Need To Know: Analysts Are Much More Bullish On 5N Plus Inc. (TSE:VNP)

5N Plus Inc. (TSE:VNP) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The market seems to be pricing in some improvement in the business too, with the stock up 7.2% over the past week, closing at CA$4.60. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

After this upgrade, 5N Plus' five analysts are now forecasting revenues of US$209m in 2021. This would be a notable 18% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 409% to US$0.14. Before this latest update, the analysts had been forecasting revenues of US$169m and earnings per share (EPS) of US$0.09 in 2021. 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 5N Plus

It will come as no surprise to learn that the analysts have increased their price target for 5N Plus 5.0% to US$4.56 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. Currently, the most bullish analyst values 5N Plus at US$6.05 per share, while the most bearish prices it at US$5.26. This is a very narrow spread of estimates, implying either that 5N Plus 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. One thing stands out from these estimates, which is that 5N Plus is forecast to grow faster in the future than it has in the past, with revenues expected to display 18% annualised growth until the end of 2021. If achieved, this would be a much better result than the 8.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.8% annually. So it looks like 5N Plus is expected to grow faster than its competitors, at least for a while.

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, 5N Plus could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for 5N Plus going out to 2023, and you can see them free on our platform here..

We also provide an overview of the 5N Plus Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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This article by Simply Wall St is general in nature. 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.
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