Yahoo Finance Need To Know: Analysts Are Much More Bullish On Perenti Global Limited (ASX:PRN)
Celebrations may be in order for Perenti Global Limited (ASX:PRN) 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.
After the upgrade, the four analysts covering Perenti Global are now predicting revenues of AU$2.4b in 2022. If met, this would reflect a credible 7.8% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 42% to AU$0.07. Previously, the analysts had been modelling revenues of AU$2.1b and earnings per share (EPS) of AU$0.062 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
Check out our latest analysis for Perenti Global
Despite these upgrades, the analysts have not made any major changes to their price target of AU$1.05, 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. There are some variant perceptions on Perenti Global, with the most bullish analyst valuing it at AU$1.20 and the most bearish at AU$1.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Perenti Global's revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2022 being well below the historical 24% p.a. growth over the last five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 0.2% annually. Factoring in the forecast slowdown in growth, it's pretty clear that Perenti Global is still expected to grow faster than the wider 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, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Perenti Global could be a good candidate for more research.
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 Perenti Global 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.
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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.
