Analysts Are Betting On FirstGroup plc (LON:FGP) With A Big Upgrade This Week

FirstGroup plc (LON:FGP) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. The market may be pricing in some blue sky too, with the share price gaining 17% to UK£2.28 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.

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Following the latest upgrade, the current consensus, from the four analysts covering FirstGroup, is for revenues of UK£4.4b in 2026, which would reflect a chunky 12% reduction in FirstGroup's sales over the past 12 months. Statutory earnings per share are anticipated to reduce 3.5% to UK£0.21 in the same period. Previously, the analysts had been modelling revenues of UK£4.0b and earnings per share (EPS) of UK£0.19 in 2026. Sentiment certainly seems to have improved in recent times, with a nice gain to revenue and a slight bump in earnings per share estimates.

Check out our latest analysis for FirstGroup

With these upgrades, we're not surprised to see that the analysts have lifted their price target 9.1% to UK£2.31 per share.

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. We would highlight that sales are expected to reverse, with a forecast 12% annualised revenue decline to the end of 2026. That is a notable change from historical growth of 4.3% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.1% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - FirstGroup is expected to lag the wider 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. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower 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. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at FirstGroup.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple FirstGroup analysts - going out to 2028, 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 with high insider ownership.

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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.