News Flash: Analysts Just Made A Sizeable Upgrade To Their SABIC Agri-Nutrients Company (TADAWUL:2020) Forecasts

SABIC Agri-Nutrients Company (TADAWUL:2020) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the current consensus from SABIC Agri-Nutrients' six analysts is for revenues of ر.س19b in 2022 which - if met - would reflect a decent 17% increase on its sales over the past 12 months. Statutory earnings per share are forecast to be ر.س20.18, approximately in line with the last 12 months. Previously, the analysts had been modelling revenues of ر.س18b and earnings per share (EPS) of ر.س20.29 in 2022. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

Our analysis indicates that 2020 is potentially undervalued!

It may not be a surprise to see that the analysts have reconfirmed their price target of ر.س177, implying that the uplift in sales is not expected to greatly contribute to SABIC Agri-Nutrients's valuation in the near term. 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 SABIC Agri-Nutrients at ر.س220 per share, while the most bearish prices it at ر.س150. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 37% growth on an annualised basis. That is in line with its 33% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues fall 6.7% per year. So it's clear that not only is revenue growth expected to be maintained, but SABIC Agri-Nutrients is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at SABIC Agri-Nutrients.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple SABIC Agri-Nutrients analysts - going out to 2024, 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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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.