Golden Agri-Resources Ltd (SGX:E5H) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

Following the upgrade, the latest consensus from Golden Agri-Resources' five analysts is for revenues of US$11b in 2022, which would reflect a decent 9.1% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 166% to US$0.10. Previously, the analysts had been modelling revenues of US$10b and earnings per share (EPS) of US$0.05 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for Golden Agri-Resources

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$0.30, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Golden Agri-Resources at US$0.80 per share, while the most bearish prices it at US$0.30. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Golden Agri-Resources' growth to accelerate, with the forecast 12% annualised growth to the end of 2022 ranking favourably alongside historical growth of 2.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Golden Agri-Resources is expected to grow much faster than its 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster 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 Golden Agri-Resources 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 Golden Agri-Resources 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.