New Forecasts: Here's What Analysts Think The Future Holds For Hafnia Limited (OB:HAFNI)

Hafnia Limited (OB:HAFNI) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory 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 consensus from Hafnia's four analysts is for revenues of US$1.4b in 2023, which would reflect a stressful 24% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to decrease 6.0% to US$1.40 in the same period. Previously, the analysts had been modelling revenues of US$1.2b and earnings per share (EPS) of US$1.16 in 2023. 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.

Check out our latest analysis for Hafnia

Despite these upgrades, the analysts have not made any major changes to their price target of kr83.60, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Hafnia analyst has a price target of kr87.00 per share, while the most pessimistic values it at kr80.00. This is a very narrow spread of estimates, implying either that Hafnia is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 24% by the end of 2023. This indicates a significant reduction from annual growth of 23% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 9.7% per year. The forecasts do look bearish for Hafnia, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates, with sales apparently performing well even though revenue growth expected to decline against the wider market this year. 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 Hafnia could be a good candidate for more research.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential warning signs with Hafnia, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 3 other warning signs we've identified .

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.