Industry Analysts Just Made A Substantial Upgrade To Their Icelandic Salmon AS (OB:ISLAX) Revenue Forecasts

Shareholders in Icelandic Salmon AS (OB:ISLAX) 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. The stock price has risen 5.3% to kr179 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the latest consensus from Icelandic Salmon's two analysts is for revenues of €155m in 2022, which would reflect a major 70% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 1,390% to €1.14. Previously, the analysts had been modelling revenues of €140m and earnings per share (EPS) of €1.04 in 2022. The most recent forecasts are noticeably more optimistic, with a nice gain to revenue estimates and a lift to earnings per share as well.

View our latest analysis for Icelandic Salmon

With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.3% to kr200 per share. 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 Icelandic Salmon, with the most bullish analyst valuing it at kr200 and the most bearish at kr190 per share. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

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. It's clear from the latest estimates that Icelandic Salmon's rate of growth is expected to accelerate meaningfully, with the forecast 190% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 47% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Icelandic Salmon 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. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Icelandic Salmon.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Icelandic Salmon going out as far as 2024, 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.