Global Ship Lease, Inc. (NYSE:GSL) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's 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. The stock price has risen 5.7% to US$20.32 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
After the upgrade, the three analysts covering Global Ship Lease are now predicting revenues of US$375m in 2021. If met, this would reflect a huge 32% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 254% to US$2.46. Previously, the analysts had been modelling revenues of US$348m and earnings per share (EPS) of US$2.07 in 2021. So it seems there's been a definite increase in optimism about Global Ship Lease's future following the latest consensus numbers, with a nice increase in the earnings per share forecasts in particular.
It will come as no surprise to learn that the analysts have increased their price target for Global Ship Lease 13% to US$23.33 on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Global Ship Lease at US$25.00 per share, while the most bearish prices it at US$16.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. It's clear from the latest estimates that Global Ship Lease's rate of growth is expected to accelerate meaningfully, with the forecast 44% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 14% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.6% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Global Ship Lease 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 this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Global Ship Lease.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential flags with Global Ship Lease, including major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 2 other flags we've identified .
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.
When trading Global Ship Lease or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.