This Just In: Analysts Are Boosting Their Elmera Group ASA (OB:ELMRA) Outlook for Next Year

Celebrations may be in order for Elmera Group ASA (OB:ELMRA) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. Investors have been pretty optimistic on Elmera Group too, with the stock up 44% to kr23.56 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the most recent consensus for Elmera Group from its two analysts is for revenues of kr27b in 2023 which, if met, would be a meaningful 17% increase on its sales over the past 12 months. Statutory earnings per share are supposed to reduce 7.5% to kr2.54 in the same period. Previously, the analysts had been modelling revenues of kr24b and earnings per share (EPS) of kr2.30 in 2023. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

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Despite these upgrades, the consensus price target fell 6.4% to kr22.00, perhaps signalling that the uplift in performance is not expected to last. 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 Elmera Group, with the most bullish analyst valuing it at kr31.00 and the most bearish at kr13.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Elmera Group's past performance and to peers in the same industry. We would highlight that Elmera Group's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2023 being well below the historical 32% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 0.5% per year. Even after the forecast slowdown in growth, it seems obvious that Elmera Group is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. A lower price target is not intuitively what we would expect from a company whose business prospects are improving - at least judging by these forecasts - but if the underlying fundamentals are strong, Elmera Group could be one for the watch list.

Analysts are clearly in love with Elmera Group 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. For more information, you can click through to our platform to learn more about this and the 1 other flag we've identified .

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.