Shareholders in Austal Limited (ASX:ASB) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

After the upgrade, the five analysts covering Austal are now predicting revenues of AU$1.7b in 2024. If met, this would reflect a meaningful 8.5% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing AU$1.5b of revenue in 2024. The consensus has definitely become more optimistic, showing a nice increase in revenue forecasts.

See our latest analysis for Austal

The consensus price target fell 7.3% to AU$2.28, with the analysts clearly less optimistic about Austal's valuation following this update.

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 Austal is forecast to grow faster in the future than it has in the past, with revenues expected to display 8.5% annualised growth until the end of 2024. If achieved, this would be a much better result than the 3.3% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 11% per year. So although Austal's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Austal this year. They also expect company revenue to perform worse than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Austal.

Hungry for more information? We have analyst estimates for Austal going out to 2026, and you can see them 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.

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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.