New Forecasts: Here's What Analysts Think The Future Holds For Orient Overseas (International) Limited (HKG:316)

Celebrations may be in order for Orient Overseas (International) Limited (HKG:316) 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. Investors have been pretty optimistic on Orient Overseas (International) too, with the stock up 26% to HK$136 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 Orient Overseas (International)'s twin analysts is for revenues of US$11b in 2021, which would reflect a sizeable 32% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 176% to US$3.98. Prior to this update, the analysts had been forecasting revenues of US$9.4b and earnings per share (EPS) of US$1.49 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Orient Overseas (International)

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 Orient Overseas (International)'s rate of growth is expected to accelerate meaningfully, with the forecast 32% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 7.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.5% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Orient Overseas (International) 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. More bullish expectations could be a signal for investors to take a closer look at Orient Overseas (International).

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Orient Overseas (International) that suggests the company could be somewhat undervalued. You can learn more about our valuation methodology on our platform here.

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