News Flash: Analysts Just Made A Substantial Upgrade To Their Sipef NV (EBR:SIP) Forecasts

Sipef NV (EBR:SIP) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. 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.

After this upgrade, Sipef's twin analysts are now forecasting revenues of US$463m in 2022. This would be a solid 11% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to reduce 9.0% to US$8.19 in the same period. Previously, the analysts had been modelling revenues of US$404m and earnings per share (EPS) of US$5.86 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for Sipef

It will come as no surprise to learn that the analysts have increased their price target for Sipef 7.0% to US$77.88 on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Sipef, with the most bullish analyst valuing it at US$70.00 and the most bearish at US$67.45 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

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. It's clear from the latest estimates that Sipef's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 2.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Sipef is expected to grow much faster than its 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. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Sipef.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Sipef going out as far as 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.