BHP Billiton plc (LON:BLT), SABMiller plc (LON:SAB) and Standard Chartered PLC (LON:STAN) have all seen their earnings forecasts receive several upgrades in the last month.
Professional stock market analysts have been increasing their expectation of future profit at these companies. Has the improved sentiment made them too expensive?
BHP Billiton
In the last month, profit forecasts for BHP Billiton (LSE: BLT) (NYSE: BBL.US) have been increased six times.
Analysts now expect this super-miner to deliver 2014 profits of $3.17 per share. That puts the stock on a 2014 price-to-earnings (P/E) ratio of 10.8. The average FTSE 100 company trades on an average P/E of 16.3.
BHP shares trade on an expected yield for 2014 of 3.7%. That is a better income than the average FTSE 100 company, which is expected to pay out 3.3%.
The shares trade around 20% off a five-year high. That doesn't stop them being cheap, though.
SABMiller
Mega-brewer SABMiller (LSE: SAB) (NASDAQOTH: SBMRY.US) owns global beer brands Peroni, Grolsch and Pilsner Urquell. Toward the end of January, the company announced significant volume and price growth.
In the last month, estimates for 2014 have been increased 12 times. In the year to date, shares in SABMiller are up 12.6%. 8.5% of this increase has been delivered since 11 January. The result is that the shares now trade at an all-time high.
SAB is priced on a 2014 P/E of 18.6 times forecasts. The rising share price has pushed the expected 2014 yield down to 2.3%.
SAB shares cannot be considered cheap. However, there is no doubting the company's calibre.
Standard Chartered
Of the UK-listed banks, Standard Chartered (LSE: STAN) survived the financial crisis the best. The bank is the most Asian-focused of any listed in London. The market has traditionally valued Standard Chartered very differently to Barclays, Lloyds and Royal Bank of Scotland.
The 8.3% rise that the shares have enjoyed in 2013 has pushed the 2014 P/E to 11.3 times consensus forecasts.
Standard Chartered is expected to increase both earnings and dividends by around 9% a year for the next two years.
Despite receiving five earnings upgrades in the last month, the shares are still cheap.
Buying shares ahead of a significant change in sentiment can result in big returns. If you want to learn about how you can use investing in shares to rapidly increase your wealth then get the free Motley Fool report "10 Steps To Making A Million In The Market". This report is completely free and will be delivered to your inbox immediately. Just click here to get your copy today. It could change the way that you invest forever.
> David owns shares in Lloyds and Royal Bank of Scotland but none of the other companies mentioned. The Motley Fool owns shares in Standard Chartered.
