Industry Analysts Just Made A Sizeable Upgrade To Their Barings BDC, Inc. (NYSE:BBDC) Revenue Forecasts

Barings BDC, Inc. (NYSE:BBDC) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

Following the upgrade, the most recent consensus for Barings BDC from its six analysts is for revenues of US$201m in 2022 which, if met, would be a major 35% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 45% to US$0.99. Before this latest update, the analysts had been forecasting revenues of US$177m and earnings per share (EPS) of US$0.95 in 2022. Sentiment certainly seems to have improved in recent times, with a substantial gain in revenue and a small lift in earnings per share estimates.

See our latest analysis for Barings BDC

Despite these upgrades, the analysts have not made any major changes to their price target of US$12.18, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Barings BDC analyst has a price target of US$12.50 per share, while the most pessimistic values it at US$11.75. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Barings BDC's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 49% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 1.5% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.4% annually. Not only are Barings BDC's 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Barings BDC.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential flags with Barings BDC, including major dilution from new stock issuance in the past year. For more information, you can click through to our platform to learn more about this and the 2 other flags 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 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.