Yahoo Finance News Flash: Analysts Just Made A Meaningful 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 statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
Following the upgrade, the latest consensus from Warrior Met Coal's five analysts is for revenues of US$1.8b in 2022, which would reflect a sizeable 44% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 103% to US$12.51. Before this latest update, the analysts had been forecasting revenues of US$1.5b and earnings per share (EPS) of US$10.33 in 2022. 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.
See our latest analysis for Warrior Met Coal
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$39.33, suggesting that the forecast performance does not have a long term impact on the company's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Warrior Met Coal analyst has a price target of US$50.00 per share, while the most pessimistic values it at US$32.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Warrior Met Coal's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Warrior Met Coal is forecast to grow faster in the future than it has in the past, with revenues expected to display 62% annualised growth until the end of 2022. If achieved, this would be a much better result than the 2.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to decline 2.7% per year. So it's pretty clear that Warrior Met Coal is 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. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Warrior Met Coal.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Warrior Met Coal analysts - going out to 2024, and you can see them 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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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.
