Analysts Are Betting On ProCredit Holding AG & Co. KGaA (ETR:PCZ) With A Big Upgrade This Week

ProCredit Holding AG & Co. KGaA (ETR:PCZ) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. The revenue forecast for next year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

Following the upgrade, the current consensus from ProCredit Holding KGaA's three analysts is for revenues of €334m in 2023 which - if met - would reflect a sizeable 30% increase on its sales over the past 12 months. Statutory earnings per share are presumed to surge 45% to €1.26. Prior to this update, the analysts had been forecasting revenues of €297m and earnings per share (EPS) of €1.15 in 2023. The forecasts seem more optimistic now, with a substantial gain in revenue and a small lift in earnings per share estimates.

Our analysis indicates that PCZ is potentially undervalued!

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that ProCredit Holding KGaA's rate of growth is expected to accelerate meaningfully, with the forecast 23% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 0.7% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that ProCredit Holding KGaA is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at ProCredit Holding KGaA.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential warning sign with ProCredit Holding KGaA, including concerns around earnings quality. You can learn more, and discover the 1 other warning sign we've identified, 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.

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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.