Forecast: Analysts Think Bonava AB (publ)'s (STO:BONAV B) Business Prospects Have Improved Drastically

Bonava AB (publ) (STO:BONAV B) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

After the upgrade, the consensus from Bonava's three analysts is for revenues of kr7.9b in 2024, which would reflect a substantial 49% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to plunge 70% to kr0.55 in the same period. Previously, the analysts had been modelling revenues of kr6.3b and earnings per share (EPS) of kr0.38 in 2024. 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 Bonava

Despite these upgrades, the consensus price target fell 22% to kr20.50, perhaps signalling that the uplift in performance is not expected to last.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 42% by the end of 2024. This indicates a significant reduction from annual growth of 1.9% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 4.6% annually for the foreseeable future. So it's pretty clear that Bonava's revenues are expected to shrink faster than the wider 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 next year. Notably, analysts also upgraded their revenue estimates, with sales performing well although Bonava's revenue growth is expected to trail that of the wider market. The declining price target is a puzzle, but still - with a serious upgrade to next year's expectations, it might be time to take another look at Bonava.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential warning signs with Bonava, including its declining profit margins. You can learn more, and discover the 2 other warning signs we've identified, for 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.