Upgrade: Analysts Just Made A Captivating Increase To Their Innelec Multimédia SA (EPA:ALINN) Forecasts

Innelec Multimédia SA (EPA:ALINN) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance. The market seems to be pricing in some improvement in the business too, with the stock up 8.4% over the past week, closing at €5.44. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

After this upgrade, Innelec Multimédia's sole analyst is now forecasting revenues of €168m in 2023. This would be a major 24% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 50% to €0.61. Before this latest update, the analyst had been forecasting revenues of €142m and earnings per share (EPS) of €0.48 in 2023. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Innelec Multimédia

Although the analyst has upgraded their earnings estimates, there was no change to the consensus price target of €7.80, suggesting that the forecast performance does not have a long term impact on the company's valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Innelec Multimédia's rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 5.8% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 20% per year. Innelec Multimédia is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Innelec Multimédia could be a good candidate for more research.

The covering analyst is clearly in love with Innelec Multimédia at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 4 other risks 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.