Shareholders in Belvoir Group PLC (LON:BLV) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market seems to be pricing in some improvement in the business too, with the stock up 7.7% over the past week, closing at UK£1.40. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
After the upgrade, the solo analyst covering Belvoir Group is now predicting revenues of UK£20m in 2020. If met, this would reflect a modest 4.4% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to be UK£0.13, approximately in line with the last 12 months. Previously, the analyst had been modelling revenues of UK£14m and earnings per share (EPS) of UK£0.047 in 2020. 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.
With these upgrades, we're not surprised to see that the analyst has lifted their price target 38% to UK£2.33 per share.
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. We would highlight that Belvoir Group's revenue growth is expected to slow, with forecast 4.4% increase next year well below the historical 23% p.a. growth over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 2.3% per year. Factoring in the forecast slowdown in growth, it's pretty clear that Belvoir Group is still expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they 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, Belvoir Group 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 analyst estimates for Belvoir Group going out as far as 2022, and you can see them free on our platform here.
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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