Industry Analysts Just Upgraded Their Univest Financial Corporation (NASDAQ:UVSP) Revenue Forecasts By 23%
Shareholders in Univest Financial Corporation (NASDAQ:UVSP) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The stock price has risen 4.4% to US$28.70 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 upgrade, the latest consensus from Univest Financial's three analysts is for revenues of US$302m in 2023, which would reflect a reasonable 6.3% improvement in sales compared to the last 12 months. Per-share earnings are expected to ascend 12% to US$3.00. Before this latest update, the analysts had been forecasting revenues of US$246m and earnings per share (EPS) of US$2.96 in 2023. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.
View our latest analysis for Univest Financial
Even though revenue forecasts increased, there was no change to the consensus price target of US$30.00, suggesting the analysts are focused on earnings as the driver of value creation. 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 Univest Financial, with the most bullish analyst valuing it at US$31.00 and the most bearish at US$28.00 per share. This is a very narrow spread of estimates, implying either that Univest Financial is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. We would highlight that Univest Financial's revenue growth is expected to slow, with the forecast 6.3% annualised growth rate until the end of 2023 being well below the historical 9.1% p.a. growth over the last five years. Compare this to the 667 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 6.4% per year. Factoring in the forecast slowdown in growth, it looks like Univest Financial is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. They also upgraded their revenue forecasts, although the latest estimates suggest that Univest Financial will grow in line with the overall market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Univest Financial.
Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Univest Financial that suggests the company could be somewhat undervalued. You can learn more about our valuation methodology on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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.
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