Upgrade: Analysts Just Made A Sizeable Increase To Their Forus S.A. (SNSE:FORUS) Forecasts

Shareholders in Forus S.A. (SNSE:FORUS) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the latest consensus from Forus' sole analyst is for revenues of CL$304b in 2022, which would reflect a reasonable 3.1% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to decline 13% to CL$132 in the same period. Previously, the analyst had been modelling revenues of CL$241b and earnings per share (EPS) of CL$61.92 in 2022. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

View our latest analysis for Forus

Despite these upgrades, the analyst has not made any major changes to their price target of CL$1,683, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Forus, with the most bullish analyst valuing it at CL$1,950 and the most bearish at CL$1,500 per share. Even so, with a relatively close grouping of estimates, it looks like the analyst is quite confident in their valuations, suggesting Forus is an easy business to forecast or the underlying assumptions are obvious.

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. For example, we noticed that Forus' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 4.1% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 2.1% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 13% annually for the foreseeable future. Although Forus' revenues are expected to improve, it seems that the analyst is still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Forus could be a good candidate for more research.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Forus going out as far as 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.