Analysts Just Shipped A Substantial Upgrade To Their APAC Realty Limited (SGX:CLN) Estimates

APAC Realty Limited (SGX:CLN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. 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. Investor sentiment seems to be improving too, with the share price up 8.5% to S$0.89 over the past 7 days. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the latest consensus from APAC Realty's three analysts is for revenues of S$576m in 2021, which would reflect a huge 47% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 66% to S$0.077. Before this latest update, the analysts had been forecasting revenues of S$518m and earnings per share (EPS) of S$0.069 in 2021. 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 APAC Realty

It will come as no surprise to learn that the analysts have increased their price target for APAC Realty 18% to S$0.90 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 APAC Realty, with the most bullish analyst valuing it at S$1.05 and the most bearish at S$0.70 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting APAC Realty's growth to accelerate, with the forecast 47% annualised growth to the end of 2021 ranking favourably alongside historical growth of 5.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that APAC Realty is expected to grow much faster than its 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, APAC Realty could be worth investigating further.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on APAC Realty 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.

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.
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