This Analyst Just Made A Sizeable Upgrade To Their Arla Plast AB (STO:ARPL) Earnings Forecasts

Celebrations may be in order for Arla Plast AB (STO:ARPL) 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. The stock price has risen 7.9% to kr57.60 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

After this upgrade, Arla Plast's one analyst is now forecasting revenues of kr1.4b in 2024. This would be a major 42% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to drop 11% to kr3.41 in the same period. Prior to this update, the analyst had been forecasting revenues of kr990m and earnings per share (EPS) of kr2.83 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.

See our latest analysis for Arla Plast

With these upgrades, we're not surprised to see that the analyst has lifted their price target 12% to kr46.00 per share.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Arla Plast's rate of growth is expected to accelerate meaningfully, with the forecast 42% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.8% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Arla Plast 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, Arla Plast could be worth investigating further.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential warning signs with Arla Plast, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 2 other warning signs we've identified .

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 with high insider ownership.

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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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