Upgrade: Analysts Just Made A Sizeable Increase To Their Troax Group AB (publ) (STO:TROAX) Forecasts

Celebrations may be in order for Troax Group AB (publ) (STO:TROAX) shareholders, with the covering analyst 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. Troax Group has also found favour with investors, with the stock up an impressive 19% to kr369 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the most recent consensus for Troax Group from its lone analyst is for revenues of €249m in 2021 which, if met, would be a solid 19% increase on its sales over the past 12 months. Statutory earnings per share are presumed to shoot up 23% to €0.69. Prior to this update, the analyst had been forecasting revenues of €223m and earnings per share (EPS) of €0.59 in 2021. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Troax Group

It will come as no surprise to learn that the analyst has increased their price target for Troax Group 23% to €36.72 on the back of these upgrades.

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. It's clear from the latest estimates that Troax Group's rate of growth is expected to accelerate meaningfully, with the forecast 42% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 9.0% p.a. 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 6.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Troax Group to grow 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, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Troax Group could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Troax Group going out as far as 2023, and you can see them free on our platform here.

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.

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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.
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