Industry Analysts Just Made A Meaningful Upgrade To Their Hera S.p.A. (BIT:HER) Revenue Forecasts

Shareholders in Hera S.p.A. (BIT:HER) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Hera will make substantially more sales than they'd previously expected.

After the upgrade, the seven analysts covering Hera are now predicting revenues of €10b in 2022. If met, this would reflect a solid 17% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to reduce 5.1% to €0.24 in the same period. Before this latest update, the analysts had been forecasting revenues of €8.7b and earnings per share (EPS) of €0.24 in 2022. The forecasts seem more optimistic now, with a substantial gain in revenue and a modest lift to earnings per share estimates.

See our latest analysis for Hera

Despite these upgrades, the analysts have not made any major changes to their price target of €4.16, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 €4.85 per share, while the most pessimistic values it at €3.35. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hera's past performance and to peers in the same industry. It's clear from the latest estimates that Hera's rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 8.9% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 1.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Hera is expected to grow much 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. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Hera.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Hera 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.