News Flash: Analysts Just Made A Sizeable Upgrade To Their SITC International Holdings Company Limited (HKG:1308) Forecasts

SITC International Holdings Company Limited (HKG:1308) 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 the analysts modelling a real improvement in business performance. It will be interesting to see if the latest numbers are enough to change investors' appetite for SITC International Holdings. At HK$29.95, the stock is 4.6% below where it was a week ago.

After the upgrade, the seven analysts covering SITC International Holdings are now predicting revenues of US$3.9b in 2022. If met, this would reflect a substantial 30% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 40% to US$0.61. Before this latest update, the analysts had been forecasting revenues of US$3.3b and earnings per share (EPS) of US$0.50 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 SITC International Holdings

Despite these upgrades, the analysts have not made any major changes to their price target of US$5.95, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values SITC International Holdings at US$56.00 per share, while the most bearish prices it at US$38.73. 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. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the 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. The analysts are definitely expecting SITC International Holdings' growth to accelerate, with the forecast 30% annualised growth to the end of 2022 ranking favourably alongside historical growth of 15% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 4.2% annually. So it's clear with the acceleration in growth, SITC International Holdings is expected to grow meaningfully faster than the wider 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. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So SITC International Holdings could be a good candidate for more research.

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 SITC International Holdings 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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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.