Celebrations may be in order for Precision Tsugami (China) Corporation Limited (HKG:1651) 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. Investor sentiment seems to be improving too, with the share price up 7.5% to HK$10.60 over the past 7 days. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the latest consensus from Precision Tsugami (China)'s twin analysts is for revenues of CN¥4.0b in 2025, which would reflect a huge 28% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 37% to CN¥1.73. Previously, the analysts had been modelling revenues of CN¥3.6b and earnings per share (EPS) of CN¥1.38 in 2025. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 7.5% to CN¥10.21 per share. 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. The most optimistic Precision Tsugami (China) analyst has a price target of CN¥12.01 per share, while the most pessimistic values it at CN¥8.40. 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 Precision Tsugami (China) shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Precision Tsugami (China)'s growth to accelerate, with the forecast 28% annualised growth to the end of 2025 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Precision Tsugami (China) 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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Precision Tsugami (China) 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 least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

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 with high insider ownership.

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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.

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