Rainbows and Unicorns: The Evergreen Fibreboard Berhad (KLSE:EVERGRN) Analyst Just Became A Lot More Optimistic

Shareholders in Evergreen Fibreboard Berhad (KLSE:EVERGRN) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance.

After the upgrade, the lone analyst covering Evergreen Fibreboard Berhad is now predicting revenues of RM1.1b in 2021. If met, this would reflect a huge 21% improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of RM0.024 per share this year. Prior to this update, the analyst had been forecasting revenues of RM912m and earnings per share (EPS) of RM0.017 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for Evergreen Fibreboard Berhad

Although the analyst has upgraded their earnings estimates, there was no change to the consensus price target of RM0.67, suggesting that the forecast performance does not have a long term impact on the company's valuation.

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. One thing stands out from these estimates, which is that Evergreen Fibreboard Berhad is forecast to grow faster in the future than it has in the past, with revenues expected to display 21% annualised growth until the end of 2021. If achieved, this would be a much better result than the 3.6% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 14% per year. Not only are Evergreen Fibreboard Berhad's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, the analyst 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 Evergreen Fibreboard Berhad could be a good candidate for more research.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2023, 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. 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.