New Forecasts: Here's What Analysts Think The Future Holds For CAP S.A. (SNSE:CAP)

CAP S.A. (SNSE:CAP) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. CAP has also found favour with investors, with the stock up a remarkable 22% to CL$11,298 over the past week. Could this upgrade be enough to drive the stock even higher?

After this upgrade, CAP's four analysts are now forecasting revenues of US$3.8b in 2022. This would be an okay 3.5% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$3.3b of revenue in 2022. The consensus has definitely become more optimistic, showing a nice increase in revenue forecasts.

View our latest analysis for CAP

We'd point out that there was no major changes to their price target of US$17.04, suggesting the latest estimates were not enough to shift their view on the value of the business. 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 CAP at US$15,767 per share, while the most bearish prices it at US$13,136. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that CAP's revenue growth is expected to slow, with the forecast 4.7% annualised growth rate until the end of 2022 being well below the historical 16% p.a. growth over the last five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 3.0% annually. So it's clear that despite the slowdown in growth, CAP is still expected to grow meaningfully faster than the wider industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for CAP this year. Analysts also expect revenues to perform better 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 CAP.

Looking for more information? We have analyst estimates for CAP going out to 2024, and you can see them free on our platform here.

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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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.