Need To Know: One Analyst Is Much More Bullish On Melhus Sparebank (OB:MELG) Revenues

Celebrations may be in order for Melhus Sparebank (OB:MELG) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the most recent consensus for Melhus Sparebank from its sole analyst is for revenues of kr259m in 2023 which, if met, would be a modest 5.3% increase on its sales over the past 12 months. Per-share earnings are expected to soar 25% to kr15.88. Before this latest update, the analyst had been forecasting revenues of kr215m and earnings per share (EPS) of kr15.07 in 2023. The most recent forecasts are noticeably more optimistic, with a great increase in revenue estimates and a lift to earnings per share as well.

Check out our latest analysis for Melhus Sparebank

As a result, it might be a surprise to see that the analyst has cut their price target 5.6% to kr170, which could suggest the forecast improvement in performance is not expected to last.

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 period to the end of 2023 brings more of the same, according to the analyst, with revenue forecast to display 5.3% growth on an annualised basis. That is in line with its 6.2% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 5.2% per year. It's clear that while Melhus Sparebank's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue forecasts, although the latest estimates suggest that Melhus Sparebank will grow in line with the overall market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Melhus Sparebank.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Melhus Sparebank going out as far as 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.