Analysts Just Shipped A Substantial Upgrade To Their Hap Seng Plantations Holdings Berhad (KLSE:HSPLANT) Estimates

Celebrations may be in order for Hap Seng Plantations Holdings Berhad (KLSE:HSPLANT) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. 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.

Following the upgrade, the most recent consensus for Hap Seng Plantations Holdings Berhad from its seven analysts is for revenues of RM902m in 2022 which, if met, would be a solid 14% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to dip 5.5% to RM0.35 in the same period. Prior to this update, the analysts had been forecasting revenues of RM760m and earnings per share (EPS) of RM0.26 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 Hap Seng Plantations Holdings Berhad

Despite these upgrades, the analysts have not made any major changes to their price target of RM3.08, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Hap Seng Plantations Holdings Berhad, with the most bullish analyst valuing it at RM4.00 and the most bearish at RM2.60 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Hap Seng Plantations Holdings Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 4.2% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 0.8% per year. So it's clear with the acceleration in growth, Hap Seng Plantations Holdings Berhad 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. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Hap Seng Plantations Holdings Berhad.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Hap Seng Plantations Holdings Berhad that suggests the company could be somewhat undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.