Analysts Just Made A Decent Upgrade To Their Saras S.p.A. (BIT:SRS) Forecasts

Saras S.p.A. (BIT:SRS) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

After the upgrade, the consensus from Saras' four analysts is for revenues of €12b in 2023, which would reflect a considerable 17% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to plummet 38% to €0.26 in the same period. Prior to this update, the analysts had been forecasting revenues of €10b and earnings per share (EPS) of €0.21 in 2023. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for Saras

It will come as no surprise to learn that the analysts have increased their price target for Saras 13% to €1.85 on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Saras analyst has a price target of €2.55 per share, while the most pessimistic values it at €1.30. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Saras' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 14% by the end of 2023. This indicates a significant reduction from annual growth of 2.5% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 7.2% per year. So it's pretty clear that Saras' revenues are expected to shrink 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 next year, expecting improving business conditions. Notably, analysts also upgraded their revenue estimates, with sales performing well although Saras' revenue growth is expected to trail that of the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Saras.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Saras going out to 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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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.