Rainbows and Unicorns: Rana Gruber ASA (OB:RANA) Analysts Just Became A Lot More Optimistic

Rana Gruber ASA (OB:RANA) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

After the upgrade, the two analysts covering Rana Gruber are now predicting revenues of kr1.5b in 2023. If met, this would reflect a meaningful 16% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 74% to kr11.10. Prior to this update, the analysts had been forecasting revenues of kr1.4b and earnings per share (EPS) of kr9.83 in 2023. 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 Rana Gruber

It will come as no surprise to learn that the analysts have increased their price target for Rana Gruber 9.5% to kr57.50 on the back of these upgrades. 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. There are some variant perceptions on Rana Gruber, with the most bullish analyst valuing it at kr65.00 and the most bearish at kr50.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Rana Gruber is an easy business to forecast or the underlying assumptions are obvious.

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. It's clear from the latest estimates that Rana Gruber's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 6.0% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 1.9% per year. It seems obvious that as part of the brighter growth outlook, Rana Gruber is expected 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 next year, expecting improving business conditions. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Rana Gruber.

Analysts are clearly in love with Rana Gruber at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as the risk of cutting its dividend. You can learn more, and discover the 1 other warning sign we've identified, for 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.