News Flash: Analysts Just Made A Substantial Upgrade To Their Warrior Met Coal, Inc. (NYSE:HCC) Forecasts

Warrior Met Coal, Inc. (NYSE:HCC) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.

After this upgrade, Warrior Met Coal's five analysts are now forecasting revenues of US$1.4b in 2022. This would be a sizeable 35% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 125% to US$6.58. Prior to this update, the analysts had been forecasting revenues of US$1.3b and earnings per share (EPS) of US$6.32 in 2022. The most recent forecasts are noticeably more optimistic, with a solid increase in revenue estimates and a lift to earnings per share as well.

View our latest analysis for Warrior Met Coal

With these upgrades, we're not surprised to see that the analysts have lifted their price target 11% to US$33.17 per share. 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 Warrior Met Coal, with the most bullish analyst valuing it at US$37.00 and the most bearish at US$27.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Warrior Met Coal shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Warrior Met Coal's growth to accelerate, with the forecast 35% annualised growth to the end of 2022 ranking favourably alongside historical growth of 0.1% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Warrior Met Coal 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. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Warrior Met Coal.

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 Warrior Met Coal going out to 2024, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.