News Flash: Analysts Just Made A Sizeable Upgrade To Their Saudi Aramco Base Oil Company - Luberef (TADAWUL:2223) Forecasts

Saudi Aramco Base Oil Company - Luberef (TADAWUL:2223) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. Investor sentiment seems to be improving too, with the share price up 5.4% to ر.س175 over the past 7 days. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

After this upgrade, Saudi Aramco Base Oil Company - Luberef's four analysts are now forecasting revenues of ر.س10b in 2024. This would be a reasonable 7.2% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to accumulate 3.5% to ر.س9.26. Previously, the analysts had been modelling revenues of ر.س8.9b and earnings per share (EPS) of ر.س8.22 in 2024. 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.

Check out our latest analysis for Saudi Aramco Base Oil Company - Luberef

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of ر.س142, suggesting that the forecast performance does not have a long term impact on the company's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Saudi Aramco Base Oil Company - Luberef's revenue growth is expected to slow, with the forecast 7.2% annualised growth rate until the end of 2024 being well below the historical 18% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.1% annually. Even after the forecast slowdown in growth, it seems obvious that Saudi Aramco Base Oil Company - Luberef is also expected to grow faster 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster 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 Saudi Aramco Base Oil Company - Luberef.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Saudi Aramco Base Oil Company - Luberef that suggests the company could be somewhat 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.