News Flash: Analysts Just Made A Meaningful Upgrade To Their ProCredit Holding AG & Co. KGaA (ETR:PCZ) Forecasts

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

Following the upgrade, the latest consensus from ProCredit Holding KGaA's dual analysts is for revenues of €315m in 2022, which would reflect a huge 23% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of €267m in 2022. It looks like there's been a clear increase in optimism around ProCredit Holding KGaA, given the nice increase in revenue forecasts.

View our latest analysis for ProCredit Holding KGaA

Notably, the analysts have cut their price target 5.0% to €8.83, suggesting concerns around ProCredit Holding KGaA's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values ProCredit Holding KGaA at €9.60 per share, while the most bearish prices it at €8.00. This is a very narrow spread of estimates, implying either that ProCredit Holding KGaA is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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 50% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 0.6% 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 highlight for us was that analysts increased their revenue forecasts for ProCredit Holding KGaA this year. The analysts also expect revenues to grow faster than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of ProCredit Holding KGaA's future valuation. 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. For more information, you can click through to our platform to learn more about this and the 1 other warning sign we've identified .

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.