Growth Investors: Industry Analysts Just Upgraded Their Hera S.p.A. (BIT:HER) Revenue Forecasts By 26%

Hera S.p.A. (BIT:HER) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

After the upgrade, the consensus from Hera's six analysts is for revenues of €13b in 2022, which would reflect a definite 9.4% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of €10b in 2022. It looks like there's been a clear increase in optimism around Hera, given the sizeable gain to revenue forecasts.

See our latest analysis for Hera

We'd point out that there was no major changes to their price target of €3.82, suggesting the latest estimates were not enough to shift their view on the value of the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Hera analyst has a price target of €4.35 per share, while the most pessimistic values it at €3.05. 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 Hera shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 12% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 14% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.4% per year. It's pretty clear that Hera's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Hera this year. They're also anticipating slower revenue growth than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Hera.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential risks with Hera, including its declining profit margins. For more information, you can click through to our platform to learn more about this and the 2 other risks we've identified .

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.