Svedbergs i Dalstorp AB (publ) (STO:SVED B) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to next year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance.
Following the upgrade, the latest consensus from Svedbergs i Dalstorp's one analyst is for revenues of kr1.5b in 2022, which would reflect a sizeable 97% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 67% to kr5.83. Previously, the analyst had been modelling revenues of kr835m and earnings per share (EPS) of kr4.34 in 2022. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.
Although the analyst has upgraded their earnings estimates, there was no change to the consensus price target of kr68.50, suggesting that the forecast performance does not have a long term impact on the company's valuation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Svedbergs i Dalstorp's rate of growth is expected to accelerate meaningfully, with the forecast 72% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 6.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Svedbergs i Dalstorp 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 next year. Fortunately, the analyst 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 Svedbergs i Dalstorp 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. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.
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.