Analysts Just Made A Substantial Upgrade To Their Deutsche Beteiligungs AG (ETR:DBAN) Forecasts

Deutsche Beteiligungs AG (ETR:DBAN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market may be pricing in some blue sky too, with the share price gaining 14% to €39.30 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

After this upgrade, Deutsche Beteiligungs' five analysts are now forecasting revenues of €89m in 2021. This would be a substantial 124% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 583% to €4.03. Before this latest update, the analysts had been forecasting revenues of €77m and earnings per share (EPS) of €2.77 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for Deutsche Beteiligungs

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of €44.76, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Deutsche Beteiligungs, with the most bullish analyst valuing it at €47.00 and the most bearish at €42.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Deutsche Beteiligungs is an easy business to forecast or the underlying assumptions are obvious.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Deutsche Beteiligungs' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 124% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 38% a year over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 2.2% per year. Not only are Deutsche Beteiligungs' revenues expected to improve, it seems that the analysts are also expecting it 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. 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 Deutsche Beteiligungs could be a good candidate for more research.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Deutsche Beteiligungs going out to 2023, 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. 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.
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