Rainbows and Unicorns: SABIC Agri-Nutrients Company (TADAWUL:2020) Analysts Just Became A Lot More Optimistic

Shareholders in SABIC Agri-Nutrients Company (TADAWUL:2020) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term 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. Investors have been pretty optimistic on SABIC Agri-Nutrients too, with the stock up 10% to ر.س154 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the most recent consensus for SABIC Agri-Nutrients from its seven analysts is for revenues of ر.س18b in 2022 which, if met, would be a huge 41% increase on its sales over the past 12 months. Statutory earnings per share are presumed to jump 25% to ر.س19.28. Previously, the analysts had been modelling revenues of ر.س16b and earnings per share (EPS) of ر.س16.13 in 2022. 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 SABIC Agri-Nutrients

Despite these upgrades, the analysts have not made any major changes to their price target of ر.س172, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. The most optimistic SABIC Agri-Nutrients analyst has a price target of ر.س220 per share, while the most pessimistic values it at ر.س140. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting SABIC Agri-Nutrients' growth to accelerate, with the forecast 98% annualised growth to the end of 2022 ranking favourably alongside historical growth of 25% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 6.6% per year. It seems obvious that as part of the brighter growth outlook, SABIC Agri-Nutrients is expected to grow faster than the wider 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. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at SABIC Agri-Nutrients.

Better yet, our automated discounted cash flow calculation (DCF) suggests SABIC Agri-Nutrients could be moderately undervalued. You can learn more about our valuation methodology 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.