Upgrade: Analysts Just Made A Stunning Increase To Their United U-LI Corporation Berhad (KLSE:ULICORP) Forecasts

Shareholders in United U-LI Corporation Berhad (KLSE:ULICORP) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

After the upgrade, the solo analyst covering United U-LI Corporation Berhad is now predicting revenues of RM167m in 2020. If met, this would reflect a modest 3.4% improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analyst forecasting RM0.047 in per-share earnings. However, before this estimates update, the consensus had been expecting revenues of RM117m and RM0.031 per share in losses. It looks like there's been a definite improvement in business conditions, with a revenue upgrade supposed to lead to profitability sooner than previously forecast.

See our latest analysis for United U-LI Corporation Berhad

It will come as no surprise to learn that the analyst has increased their price target for United U-LI Corporation Berhad 431% to RM0.85 on the back of these upgrades.

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. For example, we noticed that United U-LI Corporation Berhad's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 3.4%, well above its historical decline of 0.7% a year 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 grow 9.5% per year. Although United U-LI Corporation Berhad's revenues are expected to improve, it seems that the analyst is still bearish on the business, forecasting it to grow slower than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that there is now an expectation for United U-LI Corporation Berhad to become profitable this year, compared to previous expectations of a loss. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, United U-LI Corporation Berhad could be worth investigating further.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2021, which can be seen for 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. 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.
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