Analyst Forecasts For Koninklijke DSM N.V. (AMS:DSM) Are Surging Higher

Koninklijke DSM N.V. (AMS:DSM) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following the upgrade, the most recent consensus for Koninklijke DSM from its nine analysts is for revenues of €12b in 2023 which, if met, would be a sizeable 45% increase on its sales over the past 12 months. Statutory earnings per share are presumed to shoot up 59% to €4.78. Before this latest update, the analysts had been forecasting revenues of €8.5b and earnings per share (EPS) of €3.45 in 2023. 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.

View our latest analysis for Koninklijke DSM

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of €149, suggesting that the forecast performance does not have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Koninklijke DSM analyst has a price target of €184 per share, while the most pessimistic values it at €122. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Koninklijke DSM's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 45% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 0.8% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 3.1% annually. Not only are Koninklijke DSM's revenues expected to improve, it seems that the analysts are also expecting it 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster 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 Koninklijke DSM.

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 Koninklijke DSM going out to 2025, and you can see them 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.