Brokers Are Upgrading Their Views On Neodecortech S.p.A. (BIT:NDT) With These New Forecasts

Neodecortech S.p.A. (BIT:NDT) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The market may be pricing in some blue sky too, with the share price gaining 18% to €3.99 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

After this upgrade, Neodecortech's four analysts are now forecasting revenues of €185m in 2022. This would be a meaningful 11% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 54% to €0.68. Prior to this update, the analysts had been forecasting revenues of €167m and earnings per share (EPS) of €0.56 in 2022. 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.

See our latest analysis for Neodecortech

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of €5.93, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Neodecortech, with the most bullish analyst valuing it at €6.00 and the most bearish at €5.80 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Neodecortech is an easy business to forecast or the underlying assumptions are obvious.

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. We can infer from the latest estimates that forecasts expect a continuation of Neodecortech'shistorical trends, as the 11% annualised revenue growth to the end of 2022 is roughly in line with the 13% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 2.0% annually. So it's pretty clear that Neodecortech is forecast to grow substantially faster than its 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Neodecortech.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Neodecortech analysts - going out to 2024, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.