Stock Analysis

Analyst Forecasts For Yanbu National Petrochemical Company (TADAWUL:2290) Are Surging Higher

SASE:2290
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Shareholders in Yanbu National Petrochemical Company (TADAWUL:2290) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

After the upgrade, the seven analysts covering Yanbu National Petrochemical are now predicting revenues of ر.س7.0b in 2021. If met, this would reflect a huge 25% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 59% to ر.س2.80. Previously, the analysts had been modelling revenues of ر.س6.3b and earnings per share (EPS) of ر.س2.38 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.

Check out our latest analysis for Yanbu National Petrochemical

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SASE:2290 Earnings and Revenue Growth April 26th 2021

Despite these upgrades, the analysts have not made any major changes to their price target of ر.س60.05, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Yanbu National Petrochemical analyst has a price target of ر.س70.00 per share, while the most pessimistic values it at ر.س48.60. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Yanbu National Petrochemical's past performance and to peers in the same industry. For example, we noticed that Yanbu National Petrochemical's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 35% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 4.2% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.6% annually. Not only are Yanbu National Petrochemical's revenues expected to improve, it seems that the analysts are also expecting it 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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Yanbu National Petrochemical could be a good candidate for more research.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Yanbu National Petrochemical 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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