Need To Know: One Analyst Is Much More Bullish On Caribbean Utilities Company, Ltd. (TSE:CUP.U) Revenues

Shareholders in Caribbean Utilities Company, Ltd. (TSE:CUP.U) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. The revenue forecast for this year has experienced a facelift, with the analyst now much more optimistic on its sales pipeline.

After this upgrade, Caribbean Utilities Company's solo analyst is now forecasting revenues of US$293m in 2024. This would be a credible 2.0% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to increase 4.9% to US$1.04. Previously, the analyst had been modelling revenues of US$262m and earnings per share (EPS) of US$1.03 in 2024. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.

See our latest analysis for Caribbean Utilities Company

Even though revenue forecasts increased, the consensus price target fell 6.9% to CA$16.80, perhaps suggesting that the analyst has become more pessimistic about the lack of earnings growth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Caribbean Utilities Company's revenue growth is expected to slow, with the forecast 2.0% annualised growth rate until the end of 2024 being well below the historical 9.3% 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 3.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that Caribbean Utilities Company is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with the analyst holding earnings per share steady, in line with previous estimates. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Caribbean Utilities Company.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2025, 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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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.