Celebrations may be in order for Eagle Bulk Shipping Inc. (NASDAQ:EGLE) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investors have been pretty optimistic on Eagle Bulk Shipping too, with the stock up 12% to US$48.49 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
After this upgrade, Eagle Bulk Shipping's six analysts are now forecasting revenues of US$352m in 2021. This would be a solid 19% 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 US$7.85 per share this year. Previously, the analysts had been modelling revenues of US$270m and earnings per share (EPS) of US$3.44 in 2021. 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.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 22% to US$51.80 per share. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Eagle Bulk Shipping at US$60.00 per share, while the most bearish prices it at US$42.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Eagle Bulk Shipping shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Eagle Bulk Shipping's growth to accelerate, with the forecast 25% annualised growth to the end of 2021 ranking favourably alongside historical growth of 18% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Eagle Bulk Shipping is expected to grow much faster than its 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Eagle Bulk Shipping could be worth investigating further.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Eagle Bulk Shipping going out to 2023, 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.
This article by Simply Wall St is general in nature. 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.
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