News Flash: Analysts Just Made A Sizeable Upgrade To Their Alfen N.V. (AMS:ALFEN) Forecasts

Celebrations may be in order for Alfen N.V. (AMS:ALFEN) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investors have been pretty optimistic on Alfen too, with the stock up 15% to €88.74 over the past week. Could this upgrade be enough to drive the stock even higher?

After the upgrade, the four analysts covering Alfen are now predicting revenues of €374m in 2022. If met, this would reflect a huge 50% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 79% to €1.77. Before this latest update, the analysts had been forecasting revenues of €335m and earnings per share (EPS) of €1.40 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Alfen

It will come as no surprise to learn that the analysts have increased their price target for Alfen 11% to €102 on the back of these upgrades. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Alfen analyst has a price target of €120 per share, while the most pessimistic values it at €77.00. 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 Alfen shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Alfen's past performance and to peers in the same industry. The analysts are definitely expecting Alfen's growth to accelerate, with the forecast 50% annualised growth to the end of 2022 ranking favourably alongside historical growth of 28% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Alfen is expected to grow much 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. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Alfen could be worth investigating further.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential warning sign with Alfen, including concerns around earnings quality. You can learn more, and discover the 1 other warning sign we've identified, for 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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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.