Industry Analysts Just Made A Substantial 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 forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

After this upgrade, VERBUND's nine analysts are now forecasting revenues of €11b in 2024. This would be an okay 3.7% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to sink 19% to €5.27 in the same period. Prior to this update, the analysts had been forecasting revenues of €9.4b and earnings per share (EPS) of €4.87 in 2024. Sentiment certainly seems to have improved in recent times, with a substantial gain in revenue and a small increase to earnings per share estimates.

Check out our latest analysis for VERBUND

Despite these upgrades, the analysts have not made any major changes to their price target of €68.33, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that VERBUND's revenue growth is expected to slow, with the forecast 3.7% annualised growth rate until the end of 2024 being well below the historical 33% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 0.7% annually. So it's pretty clear that, while VERBUND's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at VERBUND.

Better yet, our automated discounted cash flow calculation (DCF) suggests VERBUND could be moderately undervalued. You can learn more about our valuation methodology 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.