Industry Analysts Just Upgraded Their Saudia Dairy & Foodstuff Company (TADAWUL:2270) Revenue Forecasts By 15%

Saudia Dairy & Foodstuff Company (TADAWUL:2270) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. The market may be pricing in some blue sky too, with the share price gaining 16% to ر.س230 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the latest consensus from Saudia Dairy & Foodstuff's four analysts is for revenues of ر.س2.7b in 2023, which would reflect a meaningful 11% improvement in sales compared to the last 12 months. Per-share earnings are expected to expand 19% to ر.س9.52. Before this latest update, the analysts had been forecasting revenues of ر.س2.4b and earnings per share (EPS) of ر.س9.05 in 2023. Sentiment certainly seems to have improved in recent times, with a nice gain to revenue and a slight bump in earnings per share estimates.

Check out the opportunities and risks within the SA Food industry.

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of ر.س202, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Saudia Dairy & Foodstuff analyst has a price target of ر.س260 per share, while the most pessimistic values it at ر.س163. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Saudia Dairy & Foodstuff's growth to accelerate, with the forecast 23% annualised growth to the end of 2023 ranking favourably alongside historical growth of 6.6% 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 6.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Saudia Dairy & Foodstuff 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. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Saudia Dairy & Foodstuff.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Saudia Dairy & Foodstuff going out to 2025, and you can see them 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.