New Forecasts: Here's What Analysts Think The Future Holds For Ernst Russ AG (ETR:HXCK)

Ernst Russ AG (ETR:HXCK) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's statutory forecasts. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The stock price has risen 4.2% to €7.40 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?

After this upgrade, Ernst Russ' solitary analyst is now forecasting revenues of €163m in 2022. This would be a sizeable 76% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 163% to €1.28. Prior to this update, the analyst had been forecasting revenues of €144m and earnings per share (EPS) of €0.77 in 2022. 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.

View our latest analysis for Ernst Russ

With these upgrades, we're not surprised to see that the analyst has lifted their price target 33% to €8.80 per share.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analyst is definitely expecting Ernst Russ' growth to accelerate, with the forecast 76% annualised growth to the end of 2022 ranking favourably alongside historical growth of 13% 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 0.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Ernst Russ is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Ernst Russ could be worth investigating further.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Ernst Russ going out as far as 2024, and you can see them free on our platform here.

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.