Analysts Are Betting On Capital Power Corporation (TSE:CPX) With A Big Upgrade This Week

Shareholders in Capital Power Corporation (TSE:CPX) 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.

Following the upgrade, the consensus from eight analysts covering Capital Power is for revenues of CA$3.3b in 2024, implying an uneasy 16% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CA$2.8b in 2024. The consensus has definitely become more optimistic, showing a nice gain to revenue forecasts.

See our latest analysis for Capital Power

The consensus price target rose 6.0% to CA$44.91, with the analysts clearly more optimistic about Capital Power's prospects following this update.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Capital Power's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 29% by the end of 2024. This indicates a significant reduction from annual growth of 23% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Capital Power is expected to lag the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Capital Power.

Analysts are definitely bullish on Capital Power, 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 flags 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 backed by insiders.

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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.

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