Bullish: Analysts Just Made A Significant Upgrade To Their Doman Building Materials Group Ltd. (TSE:DBM) Forecasts

Doman Building Materials Group Ltd. (TSE:DBM) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. Investor sentiment seems to be improving too, with the share price up 7.2% to CA$9.34 over the past 7 days. Could this big upgrade push the stock even higher?

Following the upgrade, the current consensus from Doman Building Materials Group's seven analysts is for revenues of CA$2.7b in 2021 which - if met - would reflect a huge 49% increase on its sales over the past 12 months. Per-share earnings are expected to soar 61% to CA$1.92. Prior to this update, the analysts had been forecasting revenues of CA$2.2b and earnings per share (EPS) of CA$1.71 in 2021. 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 Doman Building Materials Group

It will come as no surprise to learn that the analysts have increased their price target for Doman Building Materials Group 8.2% to CA$13.07 on the back of these upgrades. 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. There are some variant perceptions on Doman Building Materials Group, with the most bullish analyst valuing it at CA$14.00 and the most bearish at CA$12.00 per share. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

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 Doman Building Materials Group's rate of growth is expected to accelerate meaningfully, with the forecast 70% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 12% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Doman Building Materials Group 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. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Doman Building Materials Group.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential concerns with Doman Building Materials Group, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 2 other concerns we've identified .

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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