News Flash: Analysts Just Made A Sizeable Upgrade To Their Jalles Machado S/A (BVMF:JALL3) Forecasts

Celebrations may be in order for Jalles Machado S/A (BVMF:JALL3) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Jalles Machado S/A will make substantially more sales than they'd previously expected.

After the upgrade, the dual analysts covering Jalles Machado S/A are now predicting revenues of R$1.3b in 2022. If met, this would reflect a substantial 24% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of R$1.2b in 2022. It looks like there's been a clear increase in optimism around Jalles Machado S/A, given the substantial gain in revenue forecasts.

View our latest analysis for Jalles Machado S/A

The consensus price target rose 19% to R$15.50, with the analysts clearly more optimistic about Jalles Machado S/A's prospects following this update. 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 Jalles Machado S/A analyst has a price target of R$16.00 per share, while the most pessimistic values it at R$15.00. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Jalles Machado S/A's past performance and to peers in the same industry. The analysts are definitely expecting Jalles Machado S/A's growth to accelerate, with the forecast 24% annualised growth to the end of 2022 ranking favourably alongside historical growth of 7.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Jalles Machado S/A 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 lifted their revenue estimates for this year. Analysts also expect revenues to grow faster than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Jalles Machado S/A.

Better yet, our automated discounted cash flow calculation (DCF) suggests Jalles Machado S/A could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. 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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