News Flash: Analysts Just Made A Meaningful Upgrade To Their EL.En. S.p.A. (BIT:ELN) Forecasts

EL.En. S.p.A. (BIT:ELN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory 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. EL.En has also found favour with investors, with the stock up a notable 13% to €41.40 over the past week. Could this upgrade be enough to drive the stock even higher?

Following the upgrade, the current consensus from EL.En's two analysts is for revenues of €508m in 2021 which - if met - would reflect a notable 12% increase on its sales over the past 12 months. Per-share earnings are expected to rise 5.7% to €1.60. Previously, the analysts had been modelling revenues of €459m and earnings per share (EPS) of €1.45 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for EL.En

It will come as no surprise to learn that the analysts have increased their price target for EL.En 23% to €49.00 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. There are some variant perceptions on EL.En, with the most bullish analyst valuing it at €50.00 and the most bearish at €48.00 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 12% growth on an annualised basis. That is in line with its 12% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.9% per year. So it's pretty clear that EL.En is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts 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, EL.En could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2023, which can be seen for 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 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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