Brokers Are Upgrading Their Views On Arabian Cement Company (TADAWUL:3010) With These New Forecasts

Arabian Cement Company (TADAWUL:3010) 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.

Following the upgrade, the most recent consensus for Arabian Cement from its three analysts is for revenues of ر.س1.2b in 2021 which, if met, would be a meaningful 17% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 46% to ر.س3.01. Before this latest update, the analysts had been forecasting revenues of ر.س1.0b and earnings per share (EPS) of ر.س2.20 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.

View our latest analysis for Arabian Cement

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Arabian Cement is forecast to grow faster in the future than it has in the past, with revenues expected to display 23% annualised growth until the end of 2021. If achieved, this would be a much better result than the 14% annual decline 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 10% annually. Not only are Arabian Cement'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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations, it might be time to take another look at Arabian Cement.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Arabian Cement that suggests the company could be somewhat undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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