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Industry Analysts Just Made A Notable Upgrade To Their GDI Integrated Facility Services Inc. (TSE:GDI) Revenue Forecasts

Shareholders in GDI Integrated Facility Services Inc. (TSE:GDI) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that GDI Integrated Facility Services will make substantially more sales than they'd previously expected. Investor sentiment seems to be improving too, with the share price up 4.4% to CA$55.60 over the past 7 days. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

After the upgrade, the six analysts covering GDI Integrated Facility Services are now predicting revenues of CA$2.0b in 2022. If met, this would reflect a huge 31% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to drop 11% to CA$2.05 in the same period. Previously, the analysts had been modelling revenues of CA$1.7b and earnings per share (EPS) of CA$2.01 in 2022. The forecasts seem more optimistic now, with a nice increase in revenue and a small lift in earnings per share estimates.

Check out our latest analysis for GDI Integrated Facility Services

earnings-and-revenue-growth
earnings-and-revenue-growth

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$68.21, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 GDI Integrated Facility Services analyst has a price target of CA$73.50 per share, while the most pessimistic values it at CA$60.00. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

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These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GDI Integrated Facility Services' past performance and to peers in the same industry. It's clear from the latest estimates that GDI Integrated Facility Services' rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 12% p.a. 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 13% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that GDI Integrated Facility Services is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for next year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at GDI Integrated Facility Services.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on GDI Integrated Facility Services 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.