News Flash: Analysts Just Made A Meaningful Upgrade To Their Höegh Autoliners ASA (OB:HAUTO) Forecasts

Celebrations may be in order for Höegh Autoliners ASA (OB:HAUTO) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. 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. Investors have been pretty optimistic on Höegh Autoliners too, with the stock up 18% to kr41.00 over the past week. Could this upgrade be enough to drive the stock even higher?

Following the latest upgrade, the dual analysts covering Höegh Autoliners provided consensus estimates of US$532m revenue in 2022, which would reflect a stressful 47% decline on its sales over the past 12 months. Statutory earnings per share are presumed to soar 34% to US$1.18. Before this latest update, the analysts had been forecasting revenues of US$448m and earnings per share (EPS) of US$0.92 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Höegh Autoliners

With these upgrades, we're not surprised to see that the analysts have lifted their price target 29% to US$6.52 per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Höegh Autoliners at US$65.00 per share, while the most bearish prices it at US$60.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

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. We would highlight that sales are expected to reverse, with a forecast 72% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 29% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.6% per year. It's pretty clear that Höegh Autoliners' revenues are expected to perform substantially worse than the wider 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. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected 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, Höegh Autoliners 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 least one analyst has provided forecasts out to 2024, 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.