Industry Analysts Just Upgraded Their Belships ASA (OB:BELCO) Revenue Forecasts By 23%

Shareholders in Belships ASA (OB:BELCO) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. Belships has also found favour with investors, with the stock up a worthy 13% to kr24.20 over the past week. Could this upgrade be enough to drive the stock even higher?

After the upgrade, the four analysts covering Belships are now predicting revenues of US$924m in 2022. If met, this would reflect a major 42% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 42% to US$0.58. Prior to this update, the analysts had been forecasting revenues of US$751m and earnings per share (EPS) of US$0.57 in 2022. The most recent forecasts are noticeably more optimistic, with a chunky increase in revenue estimates and a lift to earnings per share as well.

View our latest analysis for Belships

With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.6% to US$2.81 per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Belships, with the most bullish analyst valuing it at US$29.83 and the most bearish at US$23.08 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Belships' rate of growth is expected to accelerate meaningfully, with the forecast 60% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 45% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Belships is expected to grow much faster than its 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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Belships.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 5 potential concerns with Belships, 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 concerns we've identified .

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.