Berry Corporation (NASDAQ:BRY) 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 the analysts now much more optimistic on its sales pipeline. Investors have been pretty optimistic on Berry too, with the stock up 11% to US$9.70 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
After this upgrade, Berry's two analysts are now forecasting revenues of US$834m in 2022. This would be a satisfactory 5.2% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$753m in 2022. The consensus has definitely become more optimistic, showing a decent improvement in revenue forecasts.
We'd point out that there was no major changes to their price target of US$14.13, suggesting the latest estimates were not enough to shift their view on the value of the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Berry analyst has a price target of US$17.50 per share, while the most pessimistic values it at US$10.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. It's clear from the latest estimates that Berry's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 6.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 5.6% annually. So it's clear with the acceleration in growth, Berry is expected to grow meaningfully faster than the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Berry this year. The analysts also expect revenues to perform better than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Berry.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential risk with Berry, including the risk of cutting its dividend. For more information, you can click through to our platform to learn more about this and the 1 other risk 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.
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