Analysts Just Made A Dazzling Upgrade To Their Surteco Group SE (ETR:SUR) Forecasts

Surteco Group SE (ETR:SUR) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the current consensus from Surteco Group's dual analysts is for revenues of €939m in 2023 which - if met - would reflect a huge 26% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 101% to €1.98. Prior to this update, the analysts had been forecasting revenues of €704m and earnings per share (EPS) of €1.68 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 Surteco Group

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of €33.20, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Surteco Group analyst has a price target of €35.40 per share, while the most pessimistic values it at €31.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business 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. The analysts are definitely expecting Surteco Group's growth to accelerate, with the forecast 26% annualised growth to the end of 2023 ranking favourably alongside historical growth of 2.2% per annum 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 5.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Surteco Group is expected to grow much faster than its 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. 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 Surteco Group could be a good candidate for more research.

Analysts are clearly in love with Surteco Group at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as its declining profit margins. For more information, you can click through to our platform to learn more about this and the 3 other flags we've identified .

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.