Sioen Industries NV (EBR:SIOE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The stock price has risen 8.8% to €19.15 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.
Following the latest upgrade, the three analysts covering Sioen Industries provided consensus estimates of €450m revenue in 2020, which would reflect a chunky 12% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to dive 56% to €0.61 in the same period. Before this latest update, the analysts had been forecasting revenues of €391m and earnings per share (EPS) of €0.52 in 2020. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 12%, a significant reduction from annual growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.5% next year. It's pretty clear that Sioen Industries' revenues are expected to perform substantially worse 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, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. With a serious upgrade to expectations, it might be time to take another look at Sioen Industries.
Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Sioen Industries that suggests the company could be somewhat undervalued. For more information, you can click through to our platform to learn more about our valuation approach.
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