Need To Know: Analysts Are Much More Bullish On GDI Integrated Facility Services Inc. (TSE:GDI) Revenues

GDI Integrated Facility Services Inc. (TSE:GDI) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Investor sentiment seems to be improving too, with the share price up 4.4% to CA$55.60 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 this upgrade, GDI Integrated Facility Services' six analysts are now forecasting revenues of CA$2.0b in 2022. This would be a sizeable 31% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to fall 11% to CA$2.05 in the same period. Prior to this update, the analysts had been forecasting revenues of CA$1.7b and earnings per share (EPS) of CA$2.01 in 2022. The most recent forecasts are noticeably more optimistic, with a nice increase in revenue estimates and a lift to earnings per share as well.

See our latest analysis for GDI Integrated Facility Services

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$68.21, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic GDI Integrated Facility Services analyst has a price target of CA$73.50 per share, while the most pessimistic values it at CA$60.00. 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.

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. The analysts are definitely expecting GDI Integrated Facility Services' growth to accelerate, with the forecast 24% annualised growth to the end of 2022 ranking favourably alongside historical growth of 12% 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 13% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect GDI Integrated Facility Services to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at GDI Integrated Facility Services.

Better yet, our automated discounted cash flow calculation (DCF) suggests GDI Integrated Facility Services could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

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.