Upgrade: Analysts Just Made A Captivating Increase To Their Arion banki hf. (ICE:ARION) Forecasts

Shareholders in Arion banki hf. (ICE:ARION) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following the upgrade, the latest consensus from Arion banki hf's four analysts is for revenues of Kr58b in 2021, which would reflect a decent 9.9% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to increase 4.0% to Kr14.60. Before this latest update, the analysts had been forecasting revenues of Kr52b and earnings per share (EPS) of Kr12.22 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Arion banki hf

With these upgrades, we're not surprised to see that the analysts have lifted their price target 7.8% to Kr165 per share. 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 Arion banki hf at Kr180 per share, while the most bearish prices it at Kr150. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Arion banki hf's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Arion banki hf is forecast to grow faster in the future than it has in the past, with revenues expected to display 13% annualised growth until the end of 2021. If achieved, this would be a much better result than the 11% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.7% annually. Not only are Arion banki hf's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than 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, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Arion banki hf.

Analysts are definitely bullish on Arion banki hf, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including concerns around earnings quality. You can learn more, and discover the 1 other concern 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. 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.
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