Analysts Just Shipped A Substantial Upgrade To Their Techtronic Industries Company Limited (HKG:669) Estimates

Celebrations may be in order for Techtronic Industries Company Limited (HKG:669) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Techtronic Industries has also found favour with investors, with the stock up a remarkable 13% to HK$166 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 latest consensus from Techtronic Industries' 15 analysts is for revenues of US$13b in 2021, which would reflect a decent 9.3% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to expand 11% to US$0.60. Previously, the analysts had been modelling revenues of US$12b and earnings per share (EPS) of US$0.54 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Check out our latest analysis for Techtronic Industries

With these upgrades, we're not surprised to see that the analysts have lifted their price target 15% to US$23.12 per share. 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 Techtronic Industries, with the most bullish analyst valuing it at US$200 and the most bearish at US$143 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. 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 Techtronic Industries' rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 15% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 11% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Techtronic Industries 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Techtronic Industries could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Techtronic Industries going out to 2023, and you can see them free on our platform here..

You can also see our analysis of Techtronic Industries' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.
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