Rainbows and Unicorns: Kuehne + Nagel International AG (VTX:KNIN) Analysts Just Became A Lot More Optimistic

Kuehne + Nagel International AG (VTX:KNIN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory 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. The market seems to be pricing in some improvement in the business too, with the stock up 7.4% over the past week, closing at CHF256. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

After the upgrade, the eleven analysts covering Kuehne + Nagel International are now predicting revenues of CHF34b in 2022. If met, this would reflect a major 24% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 38% to CHF17.53. Before this latest update, the analysts had been forecasting revenues of CHF31b and earnings per share (EPS) of CHF14.90 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Kuehne + Nagel International

Despite these upgrades, the analysts have not made any major changes to their price target of CHF286, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. Currently, the most bullish analyst values Kuehne + Nagel International at CHF400 per share, while the most bearish prices it at CHF160. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Kuehne + Nagel International's rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 6.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 1.9% annually. It seems obvious that as part of the brighter growth outlook, Kuehne + Nagel International is expected to grow faster than the wider 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, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Kuehne + Nagel International.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Kuehne + Nagel International going out to 2024, 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.