The Rana Gruber AS (OB:RANA) Analyst Just Boosted Their Forecasts By A Massive Amount

Shareholders in Rana Gruber AS (OB:RANA) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Investor sentiment seems to be improving too, with the share price up 4.8% to kr56.40 over the past 7 days. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

After the upgrade, the consensus from Rana Gruber's solo analyst is for revenues of kr1.5b in 2022, which would reflect a disturbing 20% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to dive 27% to kr10.92 in the same period. Prior to this update, the analyst had been forecasting revenues of kr975m and earnings per share (EPS) of kr4.16 in 2022. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

View our latest analysis for Rana Gruber

It will come as no surprise to learn that the analyst has increased their price target for Rana Gruber 30% to kr65.00 on the back of these upgrades.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 17% by the end of 2022. This indicates a significant reduction from annual growth of 28% over the last three years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 2.7% per year. The forecasts do look bearish for Rana Gruber, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for next year, expecting improving business conditions. They also upgraded their revenue estimates, with sales apparently performing well even though revenue growth expected to decline against the wider market next year. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Rana Gruber could be worth investigating further.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2023, which can be seen 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.