News Flash: Analysts Just Made A Huge Upgrade To Their Fu Yu Corporation Limited (SGX:F13) Forecasts

Fu Yu Corporation Limited (SGX:F13) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

After the upgrade, the dual analysts covering Fu Yu are now predicting revenues of S$266m in 2022. If met, this would reflect a huge 36% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 45% to S$0.034. Previously, the analysts had been modelling revenues of S$152m and earnings per share (EPS) of S$0.026 in 2022. 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 Fu Yu

Despite these upgrades, the consensus price target fell 11% to S$0.29, perhaps signalling that the uplift in performance is not expected to last. 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 Fu Yu analyst has a price target of S$0.30 per share, while the most pessimistic values it at S$0.29. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Fu Yu is forecast to grow faster in the future than it has in the past, with revenues expected to display 36% annualised growth until the end of 2022. If achieved, this would be a much better result than the 3.9% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 12% per year. Not only are Fu Yu'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 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The declining price target is a puzzle, but still - with a serious upgrade to this year's expectations, it might be time to take another look at Fu Yu.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential concern with Fu Yu, including concerns around earnings quality. You can learn more, and discover the 1 other concern we've identified, for free on our platform here.

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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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.