Upgrade: Analysts Just Made A Meaningful Increase 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 statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investors have been pretty optimistic on Sipef too, with the stock up 12% to €51.90 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

After this upgrade, Sipef's twin analysts are now forecasting revenues of US$426m in 2021. This would be a substantial 26% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 42% to US$7.97. Prior to this update, the analysts had been forecasting revenues of US$386m and earnings per share (EPS) of US$3.21 in 2021. 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.

View our latest analysis for Sipef

With these upgrades, we're not surprised to see that the analysts have lifted their price target 9.5% to US$71.57 per share.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Sipef's rate of growth is expected to accelerate meaningfully, with the forecast 26% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 0.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.5% 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Sipef could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Sipef going out as far as 2023, and you can see them 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.
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