Stock Analysis

Rainbows and Unicorns: Genomma Lab Internacional, S.A.B. de C.V. (BMV:LABB) Analysts Just Became A Lot More Optimistic

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BMV:LAB B
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Shareholders in Genomma Lab Internacional, S.A.B. de C.V. (BMV:LABB) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the current consensus from Genomma Lab Internacional. de's five analysts is for revenues of Mex$17b in 2022 which - if met - would reflect a credible 5.7% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 26% to Mex$1.70. Prior to this update, the analysts had been forecasting revenues of Mex$14b and earnings per share (EPS) of Mex$1.50 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 Genomma Lab Internacional. de

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BMV:LAB B Earnings and Revenue Growth September 24th 2022

Despite these upgrades, the analysts have not made any major changes to their price target of Mex$25.73, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Genomma Lab Internacional. de, with the most bullish analyst valuing it at Mex$31.00 and the most bearish at Mex$18.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 analysts are definitely expecting Genomma Lab Internacional. de's growth to accelerate, with the forecast 12% annualised growth to the end of 2022 ranking favourably alongside historical growth of 6.8% per annum 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 5.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Genomma Lab Internacional. de to grow faster than the wider 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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better 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 Genomma Lab Internacional. de.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Genomma Lab Internacional. de going out to 2024, and you can see them free on our platform here..

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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