Analysts Just Published A Bright New Outlook For BRC Asia Limited's (SGX:BEC)

Celebrations may be in order for BRC Asia Limited (SGX:BEC) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. 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.

Following the upgrade, the current consensus from BRC Asia's three analysts is for revenues of S$1.6b in 2022 which - if met - would reflect a major 36% increase on its sales over the past 12 months. Statutory earnings per share are presumed to shoot up 73% to S$0.30. Before this latest update, the analysts had been forecasting revenues of S$1.4b and earnings per share (EPS) of S$0.22 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for BRC Asia

It will come as no surprise to learn that the analysts have increased their price target for BRC Asia 8.6% to S$2.30 on the back of these upgrades. 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. There are some variant perceptions on BRC Asia, with the most bullish analyst valuing it at S$2.50 and the most bearish at S$2.15 per share. This is a very narrow spread of estimates, implying either that BRC Asia is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting BRC Asia's growth to accelerate, with the forecast 36% annualised growth to the end of 2022 ranking favourably alongside historical growth of 22% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect BRC Asia 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, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, BRC Asia could be worth investigating further.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential flags with BRC Asia, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 2 other flags we've identified .

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.