Upgrade: Analysts Just Made A Stunning Increase To Their Western Bulk Chartering AS (OB:WEST) Forecasts

Western Bulk Chartering AS (OB:WEST) shareholders will have a reason to smile today, with the covering analyst 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. Investor sentiment seems to be improving too, with the share price up 6.5% to kr49.30 over the past 7 days. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the consensus from sole analyst covering Western Bulk Chartering is for revenues of US$99m in 2022, implying a painful 93% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to nosedive 31% to US$1.66 in the same period. Prior to this update, the analyst had been forecasting revenues of US$71m and earnings per share (EPS) of US$0.90 in 2022. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Western Bulk Chartering

It will come as no surprise to learn that the analyst has increased their price target for Western Bulk Chartering 15% to kr60.00 on the back of these upgrades.

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 93% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 8.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Western Bulk Chartering is expected to lag the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Pleasantly, the analyst also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Western Bulk Chartering.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential warning signs with Western Bulk Chartering, including dilutive stock issuance over the past year. You can learn more, and discover the 2 other warning signs we've identified, 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.