Need To Know: Analysts Are Much More Bullish On BayWa Aktiengesellschaft (ETR:BYW) Revenues

BayWa Aktiengesellschaft (ETR:BYW) 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. Investors have been pretty optimistic on BayWa too, with the stock up 14% to €67.40 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the current consensus from BayWa's three analysts is for revenues of €22b in 2022 which - if met - would reflect a meaningful 12% increase on its sales over the past 12 months. Statutory earnings per share are presumed to accumulate 3.6% to €1.68. Prior to this update, the analysts had been forecasting revenues of €20b and earnings per share (EPS) of €1.65 in 2022. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

Check out our latest analysis for BayWa

Even though revenue forecasts increased, there was no change to the consensus price target of €45.00, suggesting the analysts are focused on earnings as the driver of value creation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that BayWa's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 3.6% p.a. 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 6.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that BayWa is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected 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 BayWa.

Better yet, our automated discounted cash flow calculation (DCF) suggests BayWa 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.