Celebrations may be in order for Dun & Bradstreet Holdings, Inc. (NYSE:DNB) 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 analysts modelling a real improvement in business performance.
After the upgrade, the ten analysts covering Dun & Bradstreet Holdings are now predicting revenues of US$2.2b in 2021. If met, this would reflect a major 24% improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of US$0.089 per share this year. Before this latest update, the analysts had been forecasting revenues of US$1.9b and earnings per share (EPS) of US$0.04 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
Despite these upgrades, the analysts have not made any major changes to their price target of US$29.42, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Dun & Bradstreet Holdings analyst has a price target of US$33.00 per share, while the most pessimistic values it at US$24.00. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. One thing stands out from these estimates, which is that Dun & Bradstreet Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to grow 24%. If achieved, this would be a much better result than the 1.3% annual decline over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 7.6% next year. Not only are Dun & Bradstreet Holdings' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Dun & Bradstreet Holdings could be a good candidate for more research.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Dun & Bradstreet Holdings going out to 2025, and you can see them free on our platform here..
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