Yahoo Finance Analysts' Revenue Estimates For Suncorp Group Limited (ASX:SUN) Are Surging Higher
Suncorp Group Limited (ASX:SUN) 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. The market seems to be pricing in some improvement in the business too, with the stock up 8.4% over the past week, closing at AU$12.79. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
After the upgrade, the consensus from Suncorp Group's ten analysts is for revenues of AU$10b in 2022, which would reflect a substantial 26% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to fall 10% to AU$0.73 in the same period. Previously, the analysts had been modelling revenues of AU$8.9b and earnings per share (EPS) of AU$0.70 in 2022. The most recent forecasts are noticeably more optimistic, with a substantial gain in revenue estimates and a lift to earnings per share as well.
Check out our latest analysis for Suncorp Group
It will come as no surprise to learn that the analysts have increased their price target for Suncorp Group 7.0% to AU$12.81 on the back of these upgrades. 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. The most optimistic Suncorp Group analyst has a price target of AU$14.21 per share, while the most pessimistic values it at AU$10.77. This is a very narrow spread of estimates, implying either that Suncorp Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. Over the past five years, revenues have declined around 2.3% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 26% decline in revenue until the end of 2022. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.0% per year. So while a broad number of companies are forecast to grow, unfortunately Suncorp Group is expected to see its sales affected worse than other companies in the industry.
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. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Suncorp Group.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Suncorp Group going out to 2024, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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