News Flash: Analysts Just Made A Meaningful Upgrade To Their Avance Gas Holding Ltd (OB:AGAS) Forecasts

Celebrations may be in order for Avance Gas Holding Ltd (OB:AGAS) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the latest upgrade, the current consensus, from the five analysts covering Avance Gas Holding, is for revenues of US$169m in 2021, which would reflect a concerning 31% reduction in Avance Gas Holding's sales over the past 12 months. Per-share earnings are expected to rise 7.2% to US$1.01. Previously, the analysts had been modelling revenues of US$150m and earnings per share (EPS) of US$0.78 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Avance Gas Holding

It will come as no surprise to learn that the analysts have increased their price target for Avance Gas Holding 6.0% to kr50.17 on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Avance Gas Holding analyst has a price target of kr55.00 per share, while the most pessimistic values it at kr44.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 31%, a significant reduction from annual growth of 0.009% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.3% annually for the foreseeable future. It's pretty clear that Avance Gas Holding's revenues are expected to perform substantially worse 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 next year. 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, Avance Gas Holding could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Avance Gas Holding going out to 2022, and you can see them free on our platform here..

You can also see our analysis of Avance Gas Holding's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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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