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Celebrations may be in order for Journeo plc (LON:JNEO) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with the analyst 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 6.0% over the past week, closing at UK£2.29. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
Following the upgrade, the current consensus from Journeo's solo analyst is for revenues of UK£46m in 2023 which - if met - would reflect a sizeable 35% increase on its sales over the past 12 months. Per-share earnings are expected to soar 52% to UK£0.20. Before this latest update, the analyst had been forecasting revenues of UK£42m and earnings per share (EPS) of UK£0.19 in 2023. Sentiment certainly seems to have improved in recent times, with a solid increase in revenue and a small increase to earnings per share estimates.
View our latest analysis for Journeo
It will come as no surprise to learn that the analyst has increased their price target for Journeo 14% to UK£3.85 on the back of these upgrades.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Journeo's past performance and to peers in the same industry. The analyst is definitely expecting Journeo's growth to accelerate, with the forecast 35% annualised growth to the end of 2023 ranking favourably alongside historical growth of 18% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Journeo is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better 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 Journeo.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential concern with Journeo, including concerns around earnings quality. You can learn more, and discover the 1 other concern we've identified, for free on our platform here.