Industry Analysts Just Upgraded Their Israel Discount Bank Limited (TLV:DSCT) Revenue Forecasts By 12%

Israel Discount Bank Limited (TLV:DSCT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts 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 6.2% over the past week, closing at ₪19.67. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the most recent consensus for Israel Discount Bank from its two analysts is for revenues of ₪15b in 2023 which, if met, would be a solid 8.7% increase on its sales over the past 12 months. Per-share earnings are expected to jump 28% to ₪3.92. Before this latest update, the analysts had been forecasting revenues of ₪13b and earnings per share (EPS) of ₪3.85 in 2023. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.

See our latest analysis for Israel Discount Bank

It may not be a surprise to see that the analysts have reconfirmed their price target of ₪26.45, implying that the uplift in sales is not expected to greatly contribute to Israel Discount Bank's valuation in the near term. 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 Israel Discount Bank at ₪31.00 per share, while the most bearish prices it at ₪20.30. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Israel Discount Bank shareholders.

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. We can infer from the latest estimates that forecasts expect a continuation of Israel Discount Bank'shistorical trends, as the 12% annualised revenue growth to the end of 2023 is roughly in line with the 9.9% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 9.3% annually. So it's pretty clear that Israel Discount Bank is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Israel Discount Bank.

Better yet, our automated discounted cash flow calculation (DCF) suggests Israel Discount Bank could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

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.