New Forecasts: Here's What One Analyst Thinks The Future Holds For Journeo plc (LON:JNEO)

Celebrations may be in order for Journeo plc (LON:JNEO) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with the analyst now much more optimistic on its sales pipeline. The market seems to be pricing in some improvement in the business too, with the stock up 6.0% over the past week, closing at UK£2.29. Could this big upgrade push the stock even higher?

Following the upgrade, the most recent consensus for Journeo from its one analyst is for revenues of UK£46m in 2023 which, if met, would be a substantial 35% increase on its sales over the past 12 months. Per-share earnings are expected to jump 52% to UK£0.20. Before this latest update, the analyst had been forecasting revenues of UK£42m and earnings per share (EPS) of UK£0.19 in 2023. The most recent forecasts are noticeably more optimistic, with a nice increase in revenue estimates and a lift to earnings per share as well.

See our latest analysis for Journeo

With these upgrades, we're not surprised to see that the analyst has lifted their price target 14% to UK£3.85 per share.

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 Journeo's rate of growth is expected to accelerate meaningfully, with the forecast 35% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 18% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Journeo to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst 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. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Journeo.

The covering analyst is clearly in love with Journeo at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as concerns around earnings quality. You can learn more, and discover the 1 other risk we've identified, for free on our platform here.

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.