Analysts Just Published A Bright New Outlook For Deutsche Beteiligungs AG's (ETR:DBAN)

Deutsche Beteiligungs AG (ETR:DBAN) 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 this upgrade, Deutsche Beteiligungs' five analysts are forecasting 2021 revenues to be €177m, approximately in line with the last 12 months. Statutory earnings per share are anticipated to tumble 21% to €6.97 in the same period. Prior to this update, the analysts had been forecasting revenues of €158m and earnings per share (EPS) of €6.30 in 2021. 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 Deutsche Beteiligungs

Despite these upgrades, the analysts have not made any major changes to their price target of €46.44, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Deutsche Beteiligungs analyst has a price target of €49.00 per share, while the most pessimistic values it at €42.20. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. From these estimates it looks as though the analysts expect the years of declining sales to come to an end, given the flat revenue forecast out to 2021. That would be a definite improvement, given that the past five years have seen sales shrink 1.8% annually. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 3.6% per year. So it's pretty clear that, although revenues are improving, Deutsche Beteiligungs is still expected to grow slower than the 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. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower 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 Deutsche Beteiligungs.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential risks with Deutsche Beteiligungs, including concerns around earnings quality. You can learn more, and discover the 2 other risks we've identified, for free on our platform here.

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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.
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