Party Time: Brokers Just Made Major Increases To Their Hapag-Lloyd Aktiengesellschaft (ETR:HLAG) Earnings Forecasts

By
Simply Wall St
Published
May 14, 2022
XTRA:HLAG
Source: Shutterstock

Hapag-Lloyd Aktiengesellschaft (ETR:HLAG) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

Following the upgrade, the current consensus from Hapag-Lloyd's eleven analysts is for revenues of €30b in 2022 which - if met - would reflect a substantial 34% increase on its sales over the past 12 months. Per-share earnings are expected to surge 51% to €78.07. Previously, the analysts had been modelling revenues of €26b and earnings per share (EPS) of €56.52 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for Hapag-Lloyd

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XTRA:HLAG Earnings and Revenue Growth May 14th 2022

Despite these upgrades, the analysts have not made any major changes to their price target of €238, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Hapag-Lloyd at €375 per share, while the most bearish prices it at €120. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

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 Hapag-Lloyd's rate of growth is expected to accelerate meaningfully, with the forecast 48% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 15% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 7.0% per year. It seems obvious that as part of the brighter growth outlook, Hapag-Lloyd is expected 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. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Hapag-Lloyd.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Hapag-Lloyd analysts - going out to 2024, and you can see them 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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