Forecast: Analysts Think Washington H. Soul Pattinson and Company Limited's (ASX:SOL) Business Prospects Have Improved Drastically

Celebrations may be in order for Washington H. Soul Pattinson and Company Limited ( ASX:SOL ) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The stock price has risen 6.6% to AU$27.59 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

After the upgrade, the consensus from Washington H. Soul Pattinson's two analysts is for revenues of AU$2.4b in 2022, which would reflect an okay 7.4% improvement in sales compared to the last 12 months. EPS figures are expected to follow suit, with the analysts forecasting AU$2.53 in per-share earnings. Prior to this update, the analysts had been forecasting revenues of AU$1.9b and earnings per share (EPS) of AU$1.12 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.

Check out our latest analysis for Washington H. Soul Pattinson

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Washington H. Soul Pattinson's revenue growth is expected to slow, with the forecast 7.4% annualised growth rate until the end of 2022 being well below the historical 12% p.a. growth over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.6% per year. So it's pretty clear that, while Washington H. Soul Pattinson'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, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider market. More bullish expectations could be a signal for investors to take a closer look at Washington H. Soul Pattinson.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2024, which can be seen 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.