One Analyst's Earnings Estimates For Ramada Investimentos e Industria, S.A. (ELI:RAM) Are Surging Higher

Ramada Investimentos e Industria, S.A. (ELI:RAM) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following the upgrade, the latest consensus from Ramada Investimentos e Industria's lone analyst is for revenues of €172m in 2022, which would reflect a credible 3.3% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to fall 18% to €0.55 in the same period. Before this latest update, the analyst had been forecasting revenues of €130m and earnings per share (EPS) of €0.32 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.

See our latest analysis for Ramada Investimentos e Industria

Although the analyst has upgraded their earnings estimates, there was no change to the consensus price target of €7.00, suggesting that the forecast performance does not have a long term impact on the company's valuation.

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. We would highlight that Ramada Investimentos e Industria's revenue growth is expected to slow, with the forecast 3.3% annualised growth rate until the end of 2022 being well below the historical 5.2% p.a. growth over the last five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 3.0% annually. So it's clear that despite the slowdown in growth, Ramada Investimentos e Industria is still expected to grow meaningfully faster than the wider 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 this 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. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Ramada Investimentos e Industria could be a good candidate for more research.

Better yet, our automated discounted cash flow calculation (DCF) suggests Ramada Investimentos e Industria could be moderately undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

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.