Celebrations may be in order for Piper Sandler Companies (NYSE:PIPR) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investor sentiment seems to be improving too, with the share price up 7.6% to US$131 over the past 7 days. Could this big upgrade push the stock even higher?

Following the upgrade, the current consensus from Piper Sandler Companies' three analysts is for revenues of US$1.7b in 2021 which - if met - would reflect a satisfactory 6.1% increase on its sales over the past 12 months. Statutory earnings per share are expected to be US$12.42, roughly flat on the last 12 months. Prior to this update, the analysts had been forecasting revenues of US$1.5b and earnings per share (EPS) of US$8.41 in 2021. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for Piper Sandler Companies

It will come as no surprise to learn that the analysts have increased their price target for Piper Sandler Companies 11% to US$149 on the back of these upgrades. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Piper Sandler Companies analyst has a price target of US$172 per share, while the most pessimistic values it at US$135. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Piper Sandler Companies is an easy business to forecast or the underlying assumptions are obvious.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 13% growth on an annualised basis. That is in line with its 13% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 1.4% annually. So although Piper Sandler Companies is expected to maintain its revenue growth rate, it's definitely expected 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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Piper Sandler Companies could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Piper Sandler Companies analysts - going out to 2023, 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.

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.

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