Need To Know: Analysts Are Much More Bullish On AZZ Inc. (NYSE:AZZ)

Celebrations may be in order for AZZ Inc. (NYSE:AZZ) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.

Following the upgrade, the current consensus from AZZ's three analysts is for revenues of US$1.1b in 2023 which - if met - would reflect a substantial 27% increase on its sales over the past 12 months. Statutory earnings per share are presumed to swell 17% to US$3.98. Before this latest update, the analysts had been forecasting revenues of US$964m and earnings per share (EPS) of US$3.47 in 2023. 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 AZZ

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. The analysts are definitely expecting AZZ's growth to accelerate, with the forecast 27% annualised growth to the end of 2023 ranking favourably alongside historical growth of 1.6% per annum 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 10% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that AZZ is expected to grow much faster than its 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 this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations, it might be time to take another look at AZZ.

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