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Analysts Are Betting On PGT Innovations, Inc. (NYSE:PGTI) With A Big Upgrade This Week

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PGT Innovations, Inc. (NYSE:PGTI) 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 current consensus from Innovations' five analysts is for revenues of US$1.0b in 2021 which - if met - would reflect a solid 19% increase on its sales over the past 12 months. Per-share earnings are expected to surge 52% to US$1.17. Prior to this update, the analysts had been forecasting revenues of US$943m and earnings per share (EPS) of US$1.13 in 2021. Sentiment certainly seems to have improved in recent times, with a nice increase in revenue and a modest lift to earnings per share estimates.

View our latest analysis for Innovations

earnings-and-revenue-growth
earnings-and-revenue-growth

With these upgrades, we're not surprised to see that the analysts have lifted their price target 18% to US$28.50 per share. 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. There are some variant perceptions on Innovations, with the most bullish analyst valuing it at US$29.00 and the most bearish at US$27.50 per share. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

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. We can infer from the latest estimates that forecasts expect a continuation of Innovations'historical trends, as the 19% annualised revenue growth to the end of 2021 is roughly in line with the 17% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 6.7% annually. So it's pretty clear that Innovations is forecast to grow substantially faster than its 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster 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. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Innovations.

Better yet, our automated discounted cash flow calculation (DCF) suggests Innovations could be moderately undervalued. You can learn more about our valuation methodology on our platform here.

We also provide an overview of the Innovations Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.