This Just In: Analysts Are Boosting Their Otter Tail Corporation (NASDAQ:OTTR) Outlook for This Year

Shareholders in Otter Tail Corporation (NASDAQ:OTTR) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The market seems to be pricing in some improvement in the business too, with the stock up 5.3% over the past week, closing at US$53.48. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the latest consensus from Otter Tail's three analysts is for revenues of US$1.1b in 2021, which would reflect a notable 9.0% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to accumulate 5.3% to US$3.24. Before this latest update, the analysts had been forecasting revenues of US$971m and earnings per share (EPS) of US$2.59 in 2021. 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 Otter Tail

It will come as no surprise to learn that the analysts have increased their price target for Otter Tail 8.2% to US$61.33 on the back of these upgrades. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Otter Tail, with the most bullish analyst valuing it at US$64.00 and the most bearish at US$58.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Otter Tail's growth to accelerate, with the forecast 19% annualised growth to the end of 2021 ranking favourably alongside historical growth of 3.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Otter Tail 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. Fortunately, analysts 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, Otter Tail could be worth investigating further.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Otter Tail analysts - going out to 2023, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. 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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