News Flash: Analysts Just Made A Captivating Upgrade To Their CaixaBank, S.A. (BME:CABK) Forecasts

CaixaBank, S.A. (BME:CABK) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.

After this upgrade, CaixaBank's ten analysts are now forecasting revenues of €11b in 2021. This would be a sizeable 37% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 186% to €0.59. Prior to this update, the analysts had been forecasting revenues of €8.3b and earnings per share (EPS) of €0.21 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.

Check out our latest analysis for CaixaBank

It will come as no surprise to learn that the analysts have increased their price target for CaixaBank 7.3% to €2.77 on the back of these upgrades. 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. There are some variant perceptions on CaixaBank, with the most bullish analyst valuing it at €3.30 and the most bearish at €2.30 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CaixaBank's past performance and to peers in the same industry. It's clear from the latest estimates that CaixaBank's rate of growth is expected to accelerate meaningfully, with the forecast 37% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 5.6% 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 10% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that CaixaBank 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. With a serious upgrade to expectations and a rising price target, it might be time to take another look at CaixaBank.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on CaixaBank that suggests the company could be somewhat undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

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. 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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