Arvida Group Limited (NZSE:ARV) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.
After this upgrade, Arvida Group's three analysts are now forecasting revenues of NZ$290m in 2022. This would be a sizeable 71% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 116% to NZ$0.16. Previously, the analysts had been modelling revenues of NZ$218m and earnings per share (EPS) of NZ$0.14 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.0% to NZ$2.08 per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Arvida Group, with the most bullish analyst valuing it at NZ$2.20 and the most bearish at NZ$1.90 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Arvida Group's past performance and to peers in the same industry. The analysts are definitely expecting Arvida Group's growth to accelerate, with the forecast 71% annualised growth to the end of 2022 ranking favourably alongside historical growth of 18% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Arvida Group is expected to grow much faster than its 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 this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Arvida Group.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Arvida Group analysts - going out to 2024, and you can see them free on our platform here.
We also provide an overview of the Arvida Group Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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