Growth Investors: Industry Analysts Just Upgraded Their Corporación Acciona Energías Renovables, S.A. (BME:ANE) Revenue Forecasts By 12%

Corporación Acciona Energías Renovables, S.A. (BME:ANE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. The stock price has risen 8.3% to €42.74 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the current consensus from Corporación Acciona Energías Renovables' 20 analysts is for revenues of €3.4b in 2022 which - if met - would reflect a major 24% increase on its sales over the past 12 months. Statutory earnings per share are presumed to soar 72% to €1.89. Prior to this update, the analysts had been forecasting revenues of €3.0b and earnings per share (EPS) of €1.82 in 2022. The forecasts seem more optimistic now, with a nice increase in revenue and a slight bump in earnings per share estimates.

Check out our latest analysis for Corporación Acciona Energías Renovables

Despite these upgrades, the analysts have not made any major changes to their price target of €40.44, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Corporación Acciona Energías Renovables analyst has a price target of €45.00 per share, while the most pessimistic values it at €34.50. This is a very narrow spread of estimates, implying either that Corporación Acciona Energías Renovables is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Corporación Acciona Energías Renovables' rate of growth is expected to accelerate meaningfully, with the forecast 54% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 17% over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.3% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Corporación Acciona Energías Renovables 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Corporación Acciona Energías Renovables.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Corporación Acciona Energías Renovables analysts - going out to 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.