Brokers Are Upgrading Their Views On MPC Container Ships ASA (OB:MPCC) With These New Forecasts

By
Simply Wall St
Published
August 20, 2021
OB:MPCC
Source: Shutterstock

Celebrations may be in order for MPC Container Ships ASA (OB:MPCC) 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 upgrade, the most recent consensus for MPC Container Ships from its three analysts is for revenues of US$367m in 2021 which, if met, would be a huge 103% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$0.33 in per-share earnings. Previously, the analysts had been modelling revenues of US$326m and earnings per share (EPS) of US$0.24 in 2021. 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.

View our latest analysis for MPC Container Ships

earnings-and-revenue-growth
OB:MPCC Earnings and Revenue Growth August 21st 2021

With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.9% to US$3.45 per share. 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 MPC Container Ships analyst has a price target of US$34.44 per share, while the most pessimistic values it at US$24.05. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. 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.

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. It's clear from the latest estimates that MPC Container Ships' rate of growth is expected to accelerate meaningfully, with the forecast 3x annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 16% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that MPC Container Ships is expected to grow much faster than its 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 this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, MPC Container Ships could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple MPC Container Ships analysts - going out to 2023, and you can see them 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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