Need To Know: Analysts Are Much More Bullish On VERBUND AG (VIE:VER) Revenues

VERBUND AG (VIE:VER) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.

Following the latest upgrade, the nine analysts covering VERBUND provided consensus estimates of €6.2b revenue in 2022, which would reflect a chunky 20% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing €5.4b of revenue in 2022. It looks like there's been a clear increase in optimism around VERBUND, given the decent improvement in revenue forecasts.

See our latest analysis for VERBUND

There was no particular change to the consensus price target of €101, with VERBUND's latest outlook seemingly not enough to result in a change of valuation. 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. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await VERBUND shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 36% by the end of 2022. This indicates a significant reduction from annual growth of 16% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - VERBUND is expected to lag the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for 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.

Want more information? We have analyst estimates for VERBUND going out to 2024, 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.