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New Forecasts: Here's What Analysts Think The Future Holds For Bunge Limited (NYSE:BG)

Shareholders in Bunge Limited (NYSE:BG) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Bunge will make substantially more sales than they'd previously expected. The stock price has risen 6.8% to US$79.61 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?

Following the upgrade, the latest consensus from Bunge's seven analysts is for revenues of US$56b in 2021, which would reflect a notable 9.9% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to crater 24% to US$10.67 in the same period. Previously, the analysts had been modelling revenues of US$50b and earnings per share (EPS) of US$9.98 in 2021. The most recent forecasts are noticeably more optimistic, with a nice increase in revenue estimates and a lift to earnings per share as well.

View our latest analysis for Bunge

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earnings-and-revenue-growth

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$92.67, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. There are some variant perceptions on Bunge, with the most bullish analyst valuing it at US$101 and the most bearish at US$74.00 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Bunge's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 21% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 0.3% 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 3.6% per year. Not only are Bunge's revenues expected to improve, it seems that the analysts are also expecting it 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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Bunge.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential flag with Bunge, including recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 1 other flag we've identified .

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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