The UniDevice AG (ETR:UDC) Analyst Just Boosted Their Forecasts By A Stunning Amount

Shareholders in UniDevice AG (ETR:UDC) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance.

After this upgrade, UniDevice's one analyst is now forecasting revenues of €425m in 2022. This would be a credible 7.0% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 136% to €0.23. Before this latest update, the analyst had been forecasting revenues of €314m and earnings per share (EPS) of €0.14 in 2022. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

Our analysis indicates that UDC is potentially undervalued!

With these upgrades, we're not surprised to see that the analyst has lifted their price target 14% to €3.10 per share.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that UniDevice's rate of growth is expected to accelerate meaningfully, with the forecast 7.0% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 4.7% 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 11% per year. So it's clear that despite the acceleration in growth, UniDevice is expected to grow meaningfully slower than the industry average.

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, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, UniDevice could be worth investigating further.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 5 potential warning signs with UniDevice, including concerns around earnings quality. You can learn more, and discover the 3 other warning signs we've identified, for 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.