Celebrations may be in order for ALPEK, S.A.B. de C.V. (BMV:ALPEKA) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.
Following the latest upgrade, ALPEK. de's seven analysts currently expect revenues in 2022 to be Mex$159b, approximately in line with the last 12 months. Statutory earnings per share are supposed to tumble 31% to Mex$2.53 in the same period. Before this latest update, the analysts had been forecasting revenues of Mex$143b and earnings per share (EPS) of Mex$2.50 in 2022. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.
It may not be a surprise to see that the analysts have reconfirmed their price target of Mex$30.49, implying that the uplift in sales is not expected to greatly contribute to ALPEK. de's valuation in the near term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values ALPEK. de at Mex$37.00 per share, while the most bearish prices it at Mex$23.00. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. 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 1.5% growth on an annualised basis. This is compared to a historical growth rate of 6.8% 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 1.4% 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 obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at ALPEK. de.
Analysts are definitely bullish on ALPEK. de, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including a weak balance sheet. For more information, you can click through to our platform to learn more about this and the 3 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.
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.