Analysts Are Betting On AB Electrolux (publ) (STO:ELUX B) With A Big Upgrade This Week

Shareholders in AB Electrolux (publ) (STO:ELUX B) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the most recent consensus for AB Electrolux from its twelve analysts is for revenues of kr140b in 2022 which, if met, would be a decent 11% increase on its sales over the past 12 months. Per-share earnings are expected to increase 6.1% to kr17.67. Before this latest update, the analysts had been forecasting revenues of kr126b and earnings per share (EPS) of kr17.80 in 2022. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.

View our latest analysis for AB Electrolux

Even though revenue forecasts increased, there was no change to the consensus price target of kr226, suggesting the analysts are focused on earnings as the driver of value creation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic AB Electrolux analyst has a price target of kr281 per share, while the most pessimistic values it at kr180. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await AB Electrolux shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the AB Electrolux's past performance and to peers in the same industry. One thing stands out from these estimates, which is that AB Electrolux is forecast to grow faster in the future than it has in the past, with revenues expected to display 11% annualised growth until the end of 2022. If achieved, this would be a much better result than the 0.08% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 4.8% per year. So it looks like AB Electrolux is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at AB Electrolux.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on AB Electrolux that suggests the company could be somewhat undervalued. You can learn more about our valuation methodology 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.