Celebrations may be in order for Eolus Vind AB (publ) (STO:EOLU B) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. 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.
After the upgrade, the two analysts covering Eolus Vind are now predicting revenues of kr3.3b in 2022. If met, this would reflect a huge 32% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 44% to kr7.98. Prior to this update, the analysts had been forecasting revenues of kr1.9b and earnings per share (EPS) of kr3.96 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.
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of kr213, suggesting that the forecast performance does not have a long term impact on the company's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Eolus Vind analyst has a price target of kr220 per share, while the most pessimistic values it at kr205. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Eolus Vind is an easy business to forecast or the underlying assumptions are obvious.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Eolus Vind's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Eolus Vind'shistorical trends, as the 25% annualised revenue growth to the end of 2022 is roughly in line with the 23% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 7.6% per year. So although Eolus Vind is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. Fortunately, analysts 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 Eolus Vind could be a good candidate for more research.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Eolus Vind going out as far as 2023, 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.
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.
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