Yahoo Finance Need To Know: Analysts Are Much More Bullish On Fleetwood Limited (ASX:FWD) Revenues
Shareholders in Fleetwood Limited (ASX:FWD) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
Following the upgrade, the most recent consensus for Fleetwood from its dual analysts is for revenues of AU$430m in 2022 which, if met, would be a decent 9.1% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting AU$0.17 in per-share earnings. Previously, the analysts had been modelling revenues of AU$366m and earnings per share (EPS) of AU$0.21 in 2022. Although sales sentiment looks to be improving, the analysts have made a real cut to per-share earnings estimates, showing a sharp increase in pessimism recently.
View our latest analysis for Fleetwood
Analysts also cut Fleetwood's price target 11% to AU$2.87, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in sales. 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. Currently, the most bullish analyst values Fleetwood at AU$3.00 per share, while the most bearish prices it at AU$2.74. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Fleetwood's growth to accelerate, with the forecast 19% annualised growth to the end of 2022 ranking favourably alongside historical growth of 7.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.8% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Fleetwood to grow faster than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Fleetwood. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Fleetwood.
Analysts are clearly in love with Fleetwood at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as the risk of cutting its dividend. You can learn more, and discover the 1 other risk we've identified, for 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.
