Analysts Just Shipped A Notable Upgrade To Their China BlueChemical Ltd. (HKG:3983) Estimates

China BlueChemical Ltd. (HKG:3983) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the current consensus from China BlueChemical's three analysts is for revenues of CN¥15b in 2022 which - if met - would reflect a decent 12% increase on its sales over the past 12 months. Per-share earnings are expected to surge 78% to CN¥0.58. Previously, the analysts had been modelling revenues of CN¥12b and earnings per share (EPS) of CN¥0.34 in 2022. 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 China BlueChemical

Despite these upgrades, the analysts have not made any major changes to their price target of CN¥3.02, 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. The most optimistic China BlueChemical analyst has a price target of CN¥4.79 per share, while the most pessimistic values it at CN¥2.59. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that China BlueChemical's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 5.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 2.4% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that China BlueChemical is expected to grow much faster than its industry.

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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster 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 China BlueChemical.

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 China BlueChemical 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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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.