Broker Revenue Forecasts For High Co. SA (EPA:HCO) Are Surging Higher

Celebrations may be in order for High Co. SA (EPA:HCO) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. High has also found favour with investors, with the stock up a worthy 12% to €5.80 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the most recent consensus for High from its four analysts is for revenues of €141m in 2022 which, if met, would be a reasonable 2.2% increase on its sales over the past 12 months. Per-share earnings are expected to leap 29% to €0.46. Before this latest update, the analysts had been forecasting revenues of €122m and earnings per share (EPS) of €0.44 in 2022. The most recent forecasts are noticeably more optimistic, with a decent improvement in revenue estimates and a lift to earnings per share as well.

See our latest analysis for High

Despite these upgrades, the analysts have not made any major changes to their price target of €7.23, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. Currently, the most bullish analyst values High at €7.50 per share, while the most bearish prices it at €7.00. 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.

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. One thing stands out from these estimates, which is that High is forecast to grow faster in the future than it has in the past, with revenues expected to display 2.2% annualised growth until the end of 2022. If achieved, this would be a much better result than the 1.7% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.4% annually for the foreseeable future. Although High's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader 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. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at High.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential concern with High, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 1 other concern we've identified .

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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.