Vonovia SE (ETR:VNA) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 5.4% over the past week, closing at €27.18. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the latest upgrade, the seven analysts covering Vonovia provided consensus estimates of €3.7b revenue in 2024, which would reflect a disturbing 40% decline on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 56% to €2.10 per share. However, before this estimates update, the consensus had been expecting revenues of €3.3b and €1.75 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts lifting this year's revenue estimates, while at the same time increasing their loss per share forecasts to reflect the cost of achieving this growth.

Check out our latest analysis for Vonovia

The consensus price target stayed unchanged at €32.23, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 50% by the end of 2024. This indicates a significant reduction from annual growth of 15% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 13% per year. The forecasts do look bearish for Vonovia, since they're expecting it to shrink faster than the industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. They also upgraded their revenue estimates, with sales apparently performing well even though revenue growth expected to decline against the wider market this year. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Vonovia.

Analysts are definitely bullish on Vonovia, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. You can learn more, and discover the 2 other concerns we've identified, for free on our platform here.

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.

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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.