Celebrations may be in order for Singapore Airlines Limited (SGX:C6L) 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 eleven analysts covering Singapore Airlines are now predicting revenues of S$16b in 2023. If met, this would reflect a major 116% improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of S$0.35 per share this year. Prior to this update, the analysts had been forecasting revenues of S$15b and earnings per share (EPS) of S$0.16 in 2023. 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 Singapore Airlines

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of S$5.82, suggesting that the forecast performance does not have a long term impact on the company's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Singapore Airlines at S$6.80 per share, while the most bearish prices it at S$4.60. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Singapore Airlines' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 116% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 20% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 23% per year. So it looks like Singapore Airlines is expected to grow faster than its competitors, at least for a while.

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. 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 Singapore Airlines.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Singapore Airlines analysts - going out to 2025, 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.