Shareholders in World Fuel Services Corporation (NYSE:INT) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that World Fuel Services will make substantially more sales than they'd previously expected. Investors have been pretty optimistic on World Fuel Services too, with the stock up 13% to US$33.93 over the past week. Could this upgrade be enough to drive the stock even higher?
Following the upgrade, the current consensus from World Fuel Services' twin analysts is for revenues of US$29b in 2021 which - if met - would reflect a sizeable 30% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to plunge 31% to US$1.26 in the same period. Prior to this update, the analysts had been forecasting revenues of US$26b and earnings per share (EPS) of US$1.27 in 2021. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the World Fuel Services' past performance and to peers in the same industry. For example, we noticed that World Fuel Services' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 70% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 2.7% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 1.8% annually. Not only are World Fuel Services' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at World Fuel Services.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.
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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