Upgrade: Analysts Just Made A Huge Increase To Their Stalprodukt S.A. (WSE:STP) Forecasts

Stalprodukt S.A. (WSE:STP) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. 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 Stalprodukt too, with the stock up 25% to zł339 over the past week. Could this upgrade be enough to drive the stock even higher?

Following the upgrade, the latest consensus from Stalprodukt's two analysts is for revenues of zł5.2b in 2022, which would reflect a notable 11% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to dip 3.1% to zł84.85 in the same period. Before this latest update, the analysts had been forecasting revenues of zł3.9b and earnings per share (EPS) of zł31.00 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.

Check out our latest analysis for Stalprodukt

It will come as no surprise to learn that the analysts have increased their price target for Stalprodukt 13% to zł408 on the back of these upgrades. 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. The most optimistic Stalprodukt analyst has a price target of zł412 per share, while the most pessimistic values it at zł405. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Stalprodukt's growth to accelerate, with the forecast 11% annualised growth to the end of 2022 ranking favourably alongside historical growth of 3.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Stalprodukt is expected to grow much faster than its 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. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Stalprodukt.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Stalprodukt going out as far as 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.