Need To Know: Analysts Are Much More Bullish On SAF-Holland SE (ETR:SFQ)

Shareholders in SAF-Holland SE (ETR:SFQ) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term 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.

Following the upgrade, the current consensus from SAF-Holland's five analysts is for revenues of €2.0b in 2023 which - if met - would reflect a solid 12% increase on its sales over the past 12 months. Per-share earnings are expected to climb 15% to €1.70. Prior to this update, the analysts had been forecasting revenues of €1.8b and earnings per share (EPS) of €1.47 in 2023. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for SAF-Holland

Despite these upgrades, the analysts have not made any major changes to their price target of €17.60, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.

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 SAF-Holland's rate of growth is expected to accelerate meaningfully, with the forecast 26% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 5.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.1% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect SAF-Holland 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, analysts 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 SAF-Holland.

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

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.