Celebrations may be in order for GR Engineering Services Limited (ASX:GNG) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.

Following the upgrade, the current consensus from GR Engineering Services' dual analysts is for revenues of AU$279m in 2021 which - if met - would reflect a sizeable 24% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting AU$0.072 in per-share earnings. Previously, the analysts had been modelling revenues of AU$244m and earnings per share (EPS) of AU$0.051 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for GR Engineering Services

With these upgrades, we're not surprised to see that the analysts have lifted their price target 23% to AU$1.16 per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic GR Engineering Services analyst has a price target of AU$1.28 per share, while the most pessimistic values it at AU$1.03. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting GR Engineering Services is an easy business to forecast or the underlying assumptions are obvious.

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. One thing stands out from these estimates, which is that GR Engineering Services is forecast to grow faster in the future than it has in the past, with revenues expected to grow 24%. If achieved, this would be a much better result than the 4.0% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 0.2% per year. Not only are GR Engineering Services' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider 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 this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, GR Engineering Services could be worth investigating further.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

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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