Industry Analysts Just Made A Huge Upgrade To Their Prudential plc (LON:PRU) Revenue Forecasts

Prudential plc (LON:PRU) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts have sharply increased their revenue numbers, with a view that Prudential will make substantially more sales than they'd previously expected.

Following the upgrade, the consensus from seven analysts covering Prudential is for revenues of US$48b in 2020, implying a stressful 49% decline in sales compared to the last 12 months. Per-share earnings are expected to leap 89% to US$1.42. Previously, the analysts had been modelling revenues of US$35b and earnings per share (EPS) of US$1.35 in 2020. The most recent forecasts are noticeably more optimistic, with a great increase in revenue estimates and a lift to earnings per share as well.

See our latest analysis for Prudential

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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. Compare this against analyst estimates for companies in the wider industry, which suggest that revenues (in aggregate) are expected to decline 4.5% next year. While this is interesting, Prudential's, revenues are still expected to shrink next year, and at a faster rate than the wider 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. Notably, analysts also upgraded their revenue estimates, with sales performing well although Prudential's revenue growth is expected to trail that of the wider 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 Prudential.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential flags with Prudential, including its declining profit margins. For more information, you can click through to our platform to learn more about this and the 2 other flags we've identified .

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.

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. 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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