Analysts Just Made A Neat Upgrade To Their ALPEK, S.A.B. de C.V. (BMV:ALPEKA) Forecasts

ALPEK, S.A.B. de C.V. (BMV:ALPEKA) 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 the analysts modelling a real improvement in business performance.

After this upgrade, ALPEK. de's three analysts are now forecasting revenues of Mex$179b in 2022. This would be a credible 4.5% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 21% to Mex$5.74. Before this latest update, the analysts had been forecasting revenues of Mex$144b and earnings per share (EPS) of Mex$4.95 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 ALPEK. de

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of Mex$32.78, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. The most optimistic ALPEK. de analyst has a price target of Mex$37.00 per share, while the most pessimistic values it at Mex$24.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that ALPEK. de's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 6.1% growth on an annualised basis. This is compared to a historical growth rate of 7.6% over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 2.4% per year. So it's clear that despite the slowdown in growth, ALPEK. de is still expected to grow meaningfully 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. 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 ALPEK. de could be a good candidate for more research.

Analysts are clearly in love with ALPEK. de at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as a weak balance sheet. For more information, you can click through to our platform to learn more about this and the 2 other concerns we've identified .

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.