Brokers Are Upgrading Their Views On OMV Aktiengesellschaft (VIE:OMV) With These New Forecasts

Celebrations may be in order for OMV Aktiengesellschaft (VIE:OMV) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.

After the upgrade, the 14 analysts covering OMV are now predicting revenues of €62b in 2022. If met, this would reflect a solid 17% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 37% to €13.83. Before this latest update, the analysts had been forecasting revenues of €50b and earnings per share (EPS) of €10.82 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for OMV

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of €56.87, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic OMV analyst has a price target of €67.00 per share, while the most pessimistic values it at €42.30. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting OMV's growth to accelerate, with the forecast 38% annualised growth to the end of 2022 ranking favourably alongside historical growth of 14% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 5.4% per year. It seems obvious that as part of the brighter growth outlook, OMV is expected 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. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at OMV.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential flags with OMV, including its declining profit margins. You can learn more, and discover the 3 other flags we've identified, 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 that insiders are buying.

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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.