Stock Analysis

Analysts Are Betting On SinoPac Financial Holdings Company Limited (TPE:2890) With A Big Upgrade This Week

TWSE:2890
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Celebrations may be in order for SinoPac Financial Holdings Company Limited (TPE:2890) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

After the upgrade, the four analysts covering SinoPac Financial Holdings are now predicting revenues of NT$44b in 2021. If met, this would reflect a sizeable 21% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to climb 14% to NT$1.23. Previously, the analysts had been modelling revenues of NT$38b and earnings per share (EPS) of NT$1.14 in 2021. Sentiment certainly seems to have improved in recent times, with a decent improvement in revenue and a small lift in earnings per share estimates.

Check out our latest analysis for SinoPac Financial Holdings

earnings-and-revenue-growth
TSEC:2890 Earnings and Revenue Growth March 17th 2021

Despite these upgrades, the analysts have not made any major changes to their price target of NT$13.78, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic SinoPac Financial Holdings analyst has a price target of NT$14.30 per share, while the most pessimistic values it at NT$12.50. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting SinoPac Financial Holdings is an easy business to forecast or the underlying assumptions are obvious.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting SinoPac Financial Holdings' growth to accelerate, with the forecast 21% annualised growth to the end of 2021 ranking favourably alongside historical growth of 3.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that SinoPac Financial Holdings is expected to grow much faster than its 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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at SinoPac Financial Holdings.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for SinoPac Financial Holdings going out to 2022, and you can see them 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. 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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