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Shareholders in ALLETE, Inc. (NYSE:ALE) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. It will be interesting to see if the latest numbers are enough to change investors' appetite for ALLETE. Over the past week the stock price has fallen 4.8% to US$58.52.
After this upgrade, ALLETE's four analysts are now forecasting revenues of US$1.5b in 2022. This would be a modest 2.3% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$1.4b in 2022. It looks like there's been a clear increase in optimism around ALLETE, given the nice gain to revenue forecasts.
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. One thing stands out from these estimates, which is that ALLETE is forecast to grow faster in the future than it has in the past, with revenues expected to display 3.1% annualised growth until the end of 2022. If achieved, this would be a much better result than the 2.2% annual decline 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 3.8% annually for the foreseeable future. Although ALLETE's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for ALLETE this year. They also expect company revenue to perform worse than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at ALLETE.
Analysts are definitely bullish on ALLETE, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 2 other warning signs we've identified .
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.