Industry Analysts Just Upgraded Their VERBUND AG (VIE:VER) Revenue Forecasts By 27%

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.

Following this upgrade, VERBUND's ten analysts are forecasting 2022 revenues to be €6.6b, approximately in line with the last 12 months. Before the latest update, the analysts were foreseeing €5.2b of revenue in 2022. It looks like there's been a clear increase in optimism around VERBUND, given the great increase in revenue forecasts.

View our latest analysis for VERBUND

We'd point out that there was no major changes to their price target of €94.65, suggesting the latest estimates were not enough to shift their view on the value of the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic VERBUND analyst has a price target of €126 per share, while the most pessimistic values it at €74.00. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that VERBUND's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 1.8% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that VERBUND is also expected to grow slower than other industry participants.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for VERBUND this year. They also expect company revenue to perform worse than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at VERBUND.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential flag with VERBUND, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 1 other flag we've identified .

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.