Celebrations may be in order for Awilco LNG ASA (OB:ALNG) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance. The market may be pricing in some blue sky too, with the share price gaining 21% to kr8.89 in the last 7 days. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
Following the upgrade, the most recent consensus for Awilco LNG from its single analyst is for revenues of US$77m in 2023 which, if met, would be a sizeable 38% increase on its sales over the past 12 months. Statutory earnings per share are presumed to surge 133% to US$0.30. Prior to this update, the analyst had been forecasting revenues of US$75m and earnings per share (EPS) of US$0.29 in 2023. So it looks like there's been no major change in sentiment in this consensus update, although the analyst has made a slight bump in revenue forecasts.
The consensus price target increased 45% to US$1.40, with an improved revenue forecast carrying the promise of a more valuable business, in time.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Awilco LNG's past performance and to peers in the same industry. The analyst is definitely expecting Awilco LNG's growth to accelerate, with the forecast 30% annualised growth to the end of 2023 ranking favourably alongside historical growth of 16% per annum 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 10.0% per year. So it's clear with the acceleration in growth, Awilco LNG is expected to grow meaningfully faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analyst reconfirming that earnings per share are expected to continue performing in line with their prior expectations. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Awilco LNG.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Awilco LNG going out as far as 2024, and you can see them free on our platform here.
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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.