Upgrade: Analysts Just Made A Notable Increase To Their Bufab AB (publ) (STO:BUFAB) Forecasts

Bufab AB (publ) (STO:BUFAB) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the current consensus from Bufab's solitary analyst is for revenues of kr7.8b in 2022 which - if met - would reflect a major 21% increase on its sales over the past 12 months. Per-share earnings are expected to grow 20% to kr16.52. Previously, the analyst had been modelling revenues of kr6.7b and earnings per share (EPS) of kr14.93 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.

View our latest analysis for Bufab

With these upgrades, we're not surprised to see that the analyst has lifted their price target 8.7% to kr500 per share.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analyst is definitely expecting Bufab's growth to accelerate, with the forecast 29% annualised growth to the end of 2022 ranking favourably alongside historical growth of 14% 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 7.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Bufab is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that the analyst 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 Bufab.

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

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.