Industry Analysts Just Made A Notable Upgrade To Their VERBUND AG (VIE:VER) Revenue Forecasts

VERBUND AG (VIE:VER) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that VERBUND will make substantially more sales than they'd previously expected.

After the upgrade, the consensus from VERBUND's nine analysts is for revenues of €9.8b in 2023, which would reflect a small 5.5% decline in sales compared to the last year of performance. Statutory earnings per share are presumed to shoot up 50% to €7.40. Previously, the analysts had been modelling revenues of €8.6b and earnings per share (EPS) of €7.37 in 2023. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.

Check out our latest analysis for VERBUND

Even though revenue forecasts increased, there was no change to the consensus price target of €89.23, suggesting the analysts are focused on earnings as the driver of value creation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on VERBUND, with the most bullish analyst valuing it at €100.00 and the most bearish at €73.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 5.5% by the end of 2023. This indicates a significant reduction from annual growth of 25% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 3.5% annually for the foreseeable future. So it's pretty clear that VERBUND's revenues are expected to shrink faster than the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. They also upgraded their revenue estimates, with sales apparently performing well even though revenue growth expected to decline against the wider market this year. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at VERBUND.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for VERBUND going out to 2025, and you can see them free on our platform here..

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.