Brokers Are Upgrading Their Views On FuSheng Precision Co., Ltd. (TPE:6670) With These New Forecasts

Celebrations may be in order for FuSheng Precision Co., Ltd. (TPE:6670) 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. FuSheng Precision has also found favour with investors, with the stock up a noteworthy 17% to NT$234 over the past week. Could this upgrade be enough to drive the stock even higher?

After this upgrade, FuSheng Precision's twin analysts are now forecasting revenues of NT$23b in 2021. This would be a huge 59% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 109% to NT$21.87. Before this latest update, the analysts had been forecasting revenues of NT$18b and earnings per share (EPS) of NT$16.16 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.

Check out our latest analysis for FuSheng Precision

It will come as no surprise to learn that the analysts have increased their price target for FuSheng Precision 27% to NT$263 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. The most optimistic FuSheng Precision analyst has a price target of NT$270 per share, while the most pessimistic values it at NT$213. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the FuSheng Precision's past performance and to peers in the same industry. The analysts are definitely expecting FuSheng Precision's growth to accelerate, with the forecast 45% annualised growth to the end of 2021 ranking favourably alongside historical growth of 2.7% 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 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect FuSheng Precision 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 next 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, FuSheng Precision could be worth investigating further.

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