Upgrade: Analysts Just Made A Substantial Increase To Their Yü Group PLC (LON:YU.) Forecasts

Yü Group PLC (LON:YU.) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the most recent consensus for Yü Group from its single analyst is for revenues of UK£130m in 2021 which, if met, would be a huge 28% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analyst forecasting UK£0.0026 in per-share earnings. Yet prior to the latest estimates, the analyst had been forecasting revenues of UK£114m and losses of UK£0.058 per share in 2021. So we can see that this has sparked a pretty clear upgrade to expectations, with higher revenues anticipated to lead to profit sooner than previously forecast.

View our latest analysis for Yü Group

With these upgrades, we're not surprised to see that the analyst has lifted their price target 150% to €5.85 per share.

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. It's pretty clear that there is an expectation that Yü Group's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 28% growth on an annualised basis. This is compared to a historical growth rate of 39% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% per year. So it's pretty clear that, while Yü Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away from this upgrade is that the consensus now expects Yü Group to become profitable this year. Fortunately, the analyst 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, Yü Group could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Yü Group going out as far as 2025, and you can see them 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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