Industry Analysts Just Upgraded Their Hera S.p.A. (BIT:HER) Revenue Forecasts By 14%

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 revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.

After the upgrade, the consensus from Hera's six analysts is for revenues of €10b in 2022, which would reflect a disturbing 25% decline in sales compared to the last year of performance. Before the latest update, the analysts were foreseeing €9.1b of revenue in 2022. It looks like there's been a clear increase in optimism around Hera, given the solid increase in revenue forecasts.

Check out our latest analysis for Hera

There was no particular change to the consensus price target of €4.02, with Hera's latest outlook seemingly not enough to result in a change of 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. The most optimistic Hera analyst has a price target of €4.85 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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 32% by the end of 2022. This indicates a significant reduction from annual 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 3.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Hera is expected to lag the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right 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. You can learn more, and discover the 2 other risks we've identified, 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. 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.