Industry Analysts Just Made A Captivating Upgrade To Their City Cement Company (TADAWUL:3003) Revenue Forecasts

City Cement Company (TADAWUL:3003) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that City Cement will make substantially more sales than they'd previously expected.

After this upgrade, City Cement's three analysts are now forecasting revenues of ر.س479m in 2023. This would be a meaningful 11% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to ascend 15% to ر.س1.03. Prior to this update, the analysts had been forecasting revenues of ر.س432m and earnings per share (EPS) of ر.س0.99 in 2023. The most recent forecasts are noticeably more optimistic, with a decent improvement in revenue estimates and a lift to earnings per share as well.

Check out our latest analysis for City Cement

It will come as no surprise to learn that the analysts have increased their price target for City Cement 6.3% to ر.س25.08 on the back of these upgrades. 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 City Cement analyst has a price target of ر.س27.70 per share, while the most pessimistic values it at ر.س22.50. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the City Cement's past performance and to peers in the same industry. It's clear from the latest estimates that City Cement's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 1.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that City Cement is expected to grow at about the same rate as 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. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at City Cement.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple City Cement analysts - going out to 2025, 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.