Thailand Is Currently a ‘Buy’ in Asia
Watch the video with Andrew Stotz or read Watching the Street: Thailand below.
Consensus Recommendations: Thailand
The chart on the top right shows the bottom-up country relative consensus recommendation. We can see that analysts have had positive recommendations on Thailand for five years, and it’s currently a “Buy” in Asia.
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Among companies with the most positive recommendations, TASCO is a manufacturer and distributor of asphalt. The share price gained more than 500% but has fallen approximately 40% year-to-date.
Among companies with the most negative recommendations, Thai Airways has seen its share price increase by 180% year-to-date. In most cases, this fantastic run up is the likely explanation for analysts turning more negative.
Consensus Earnings Estimates: Thailand
If we move on from recommendations to earnings estimates, we first notice that analysts regularly overestimate actual EPS growth. In fact, they’ve remained overly optimistic for five years.
EPS was actually falling from 2013 to 2015, and the market suffered a rather dismal overall performance for earnings over the last three years.
The current consensus EPS growth estimate is the lowest in five years at just 10%.
Among the companies with the highest consensus EPS growth estimates, Thai Airways is expected to generate profit in 2016 after three consecutive years of losses—a massive turnaround.
Among the companies with the lowest consensus EPS growth estimates, we can see that TRUE is expecting losses in 2016 following the expensive 4G auctions that were held in Thailand in late 2015.
Consensus Target Prices: Thailand
In 2014, the consensus target price expected return in Thailand was fairly accurate.
The 2016 estimated upside has already been reached, and the 12-month forward is at 3%, since the SET index has shown strong performance year-to-date.
Among the companies with the highest consensus target price expected return, Thaicom’s expectations are partially explained by weak price performance.
Among the companies with the lowest consensus target price expected return, four of these companies have seen their share prices rise by 80% or more year-to-date.
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