Indonesia Is on the Verge of Analysts Calling It a “Buy”
Watch the video with Andrew Stotz or read Watching the Street: Indonesia below.
Consensus Recommendations: Indonesia
If we start with consensus recommendations, we can see that the bottom-up country relative consensus recommendations and analysts’ recommendations have been gradually improving over the past five years.
Learn more: How to Benefit from Our Watching the Street Charts
Now, Indonesia is on the verge of analysts calling it a “Buy.”
The top three companies with the most positive recommendations are all related to construction in Indonesia. The company WTON is a precast concrete manufacturer.
The companies with the most negative recommendations are gold and nickel miners, INCO and ANTM. They’re having a tough time, and they’re among the most negative at the moment.
Consensus Earnings Estimates: Indonesia
We can see the consensus EPS growth estimates here versus actual EPS growth. Expectations have been between 10% to 15% EPS growth, but Indonesia has seen four years of falling earnings. Earnings estimates in 2016 are lower at 4%.
Analysts expect that the palm oil producer AALI is about to improve from a poor net profit in 2015, due to a higher crude palm oil price.
And when we look at companies with the lowest consensus EPS growth estimates, three of them—PTBA, ADRO, and ITMG—are all in the coal business. EPS is expected to be lower this year, yet share price performance has remained strong for all of 2016.
Consensus Target Prices: Indonesia
Finally, we can see that for consensus target price expected return versus actual return, analysts were negative from 2012 to 2014 but only guessed the right direction of the market in 2013. Other years have been surprisingly positive.
Target price expected return and actual return are currently in line, but the year is not over yet.
One of the companies with the highest consensus target price expected return is EXCL, which is part of one of the largest telecom groups in Asia, the Axiata Group; however, it faces tough competition from Telekomunikasi Indonesia.
Four companies—ANTM, ITMG, INCO, and ADRO—have among the most negative recommendations or the lowest EPS growth estimates.
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