Analysts Just Made A Decent Upgrade To Their Azelis Group NV (EBR:AZE) Forecasts

Azelis Group NV (EBR:AZE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investor sentiment seems to be improving too, with the share price up 9.5% to €23.64 over the past 7 days. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

After the upgrade, the six analysts covering Azelis Group are now predicting revenues of €4.0b in 2022. If met, this would reflect a solid 13% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 55% to €1.06. Previously, the analysts had been modelling revenues of €3.6b and earnings per share (EPS) of €0.92 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.

See our latest analysis for Azelis Group

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of €29.04, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Azelis Group analyst has a price target of €34.00 per share, while the most pessimistic values it at €24.30. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Azelis Group's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Azelis Group's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 28% growth on an annualised basis. This is compared to a historical growth rate of 48% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.0% per year. Even after the forecast slowdown in growth, it seems obvious that Azelis Group is also expected to grow faster than the wider industry.

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. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Azelis Group.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Azelis Group that suggests the company could be somewhat undervalued. You can learn more about our valuation methodology 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.