Forecast: Analysts Think Kempower Oyj's (HEL:KEMPOWR) Business Prospects Have Improved Drastically

Shareholders in Kempower Oyj (HEL:KEMPOWR) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term 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 18% to €28.60 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the current consensus from Kempower Oyj's three analysts is for revenues of €242m in 2023 which - if met - would reflect a huge 134% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 300% to €0.26. Prior to this update, the analysts had been forecasting revenues of €205m and earnings per share (EPS) of €0.17 in 2023. 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 Kempower Oyj

With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.7% to kr315 per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Kempower Oyj, with the most bullish analyst valuing it at kr30.07 and the most bearish at kr24.38 per share. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Kempower Oyj's rate of growth is expected to accelerate meaningfully, with the forecast 134% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 52% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Kempower Oyj is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for 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.

Analysts are definitely bullish on Kempower Oyj, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 1 other warning sign we've identified .

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.