Industry Analysts Just Upgraded Their EuroDry Ltd. (NASDAQ:EDRY) Revenue Forecasts By 15%

EuroDry Ltd. (NASDAQ:EDRY) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. EuroDry shares have been sold down a little recently, so investors may be hoping the latest upgrade changes the market's appetite for the business. Shares are down 5.0% to US$37.89 in the last 7 days.

Following the upgrade, the latest consensus from EuroDry's dual analysts is for revenues of US$100m in 2022, which would reflect a huge 55% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 73% to US$17.44. Before this latest update, the analysts had been forecasting revenues of US$87m and earnings per share (EPS) of US$16.27 in 2022. The most recent forecasts are noticeably more optimistic, with a nice increase in revenue estimates and a lift to earnings per share as well.

View our latest analysis for EuroDry

With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.3% to US$44.70 per share. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on EuroDry, with the most bullish analyst valuing it at US$57.00 and the most bearish at US$32.39 per share. 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 EuroDry shareholders.

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. It's clear from the latest estimates that EuroDry's rate of growth is expected to accelerate meaningfully, with the forecast 55% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 24% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 1.4% annually. It seems obvious that as part of the brighter growth outlook, EuroDry is expected to grow faster than the wider 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. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at EuroDry.

Analysts are clearly in love with EuroDry at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 3 other flags we've identified .

You can also see our analysis of EuroDry's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.