Industry Analysts Just Made A Sizeable Upgrade To Their Centrica plc (LON:CNA) Revenue Forecasts

Centrica plc (LON:CNA) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's 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 most recent consensus for Centrica from its twelve analysts is for revenues of UK£22b in 2025 which, if met, would be a solid 9.5% increase on its sales over the past 12 months. Statutory earnings per share are supposed to plummet 38% to UK£0.17 in the same period. Before this latest update, the analysts had been forecasting revenues of UK£20b and earnings per share (EPS) of UK£0.16 in 2025. Sentiment certainly seems to have improved in recent times, with a substantial gain in revenue and a small increase to earnings per share estimates.

See our latest analysis for Centrica

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of UK£1.75, suggesting that the forecast performance does not have a long term impact on the company's valuation.

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. We would highlight that Centrica's revenue growth is expected to slow, with the forecast 9.5% annualised growth rate until the end of 2025 being well below the historical 18% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.1% per year. So it's pretty clear that, while Centrica's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Centrica.

Analysts are clearly in love with Centrica at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 2 other risks 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 with high insider ownership.

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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.