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Upgrade: Analysts Just Made A Substantial Increase To Their BE Semiconductor Industries N.V. (AMS:BESI) Forecasts

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Simply Wall St
·3 min read
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BE Semiconductor Industries N.V. (AMS:BESI) 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. BE Semiconductor Industries has also found favour with investors, with the stock up a remarkable 19% to €35.32 over the past week. Could this upgrade be enough to drive the stock even higher?

Following the upgrade, the current consensus from BE Semiconductor Industries' six analysts is for revenues of €401m in 2020 which - if met - would reflect a notable 9.6% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to reduce 6.5% to €1.10 in the same period. Previously, the analysts had been modelling revenues of €339m and earnings per share (EPS) of €0.95 in 2020. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for BE Semiconductor Industries

ENXTAM:BESI Past and Future Earnings May 5th 2020
ENXTAM:BESI Past and Future Earnings May 5th 2020

With these upgrades, we're not surprised to see that the analysts have lifted their price target 7.5% to €35.67 per share. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values BE Semiconductor Industries at €44.00 per share, while the most bearish prices it at €27.00. 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.

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. It's clear from the latest estimates that BE Semiconductor Industries' rate of growth is expected to accelerate meaningfully, with the forecast 9.6% revenue growth noticeably faster than its historical growth of 4.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 12% next year. So it's clear that despite the acceleration in growth, BE Semiconductor Industries is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at BE Semiconductor Industries.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on BE Semiconductor 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.

You can also see our analysis of BE Semiconductor Industries' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.