Analyst Forecasts For Kempower Oyj (HEL:KEMPOWR) Are Surging Higher

Kempower Oyj (HEL:KEMPOWR) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market may be pricing in some blue sky too, with the share price gaining 17% to €19.73 in the last 7 days. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the current consensus from Kempower Oyj's dual analysts is for revenues of €99m in 2022 which - if met - would reflect a huge 91% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting €0.02 in per-share earnings. However, before this estimates update, the consensus had been expecting revenues of €74m and €0.099 per share in losses. So we can see that this has sparked a pretty clear upgrade to expectations, with higher revenues anticipated to lead to profit sooner than previously forecast.

Check out our latest analysis for Kempower Oyj

With these upgrades, we're not surprised to see that the analysts have lifted their price target 70% to kr200 per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Kempower Oyj analyst has a price target of kr20.00 per share, while the most pessimistic values it at kr17.87. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Kempower Oyj is an easy business to forecast or the underlying assumptions are obvious.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Kempower Oyj's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 91% growth on an annualised basis. This is compared to a historical growth rate of 239% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.1% per year. So it's pretty clear that, while Kempower Oyj's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away from this upgrade is that the consensus now expects Kempower Oyj to become profitable this year. Fortunately, analysts 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, Kempower Oyj could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Kempower Oyj 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.