Industry Analysts Just Upgraded Their Centrica plc (LON:CNA) Revenue Forecasts By 19%

Celebrations may be in order for Centrica plc (LON:CNA) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Centrica will make substantially more sales than they'd previously expected.

Following the upgrade, the latest consensus from Centrica's eleven analysts is for revenues of UK£21b in 2022, which would reflect a sizeable 46% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing UK£18b of revenue in 2022. It looks like there's been a clear increase in optimism around Centrica, given the decent improvement in revenue forecasts.

See our latest analysis for Centrica

We'd point out that there was no major changes to their price target of UK£0.84, suggesting the latest estimates were not enough to shift their view on the value of the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Centrica, with the most bullish analyst valuing it at UK£1.20 and the most bearish at UK£0.50 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Centrica's past performance and to peers in the same industry. For example, we noticed that Centrica's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 46% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 20% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.1% per year. So it looks like Centrica is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Centrica this year. They're also forecasting more rapid revenue growth 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 Centrica.

Unsatisfied? We have analyst estimates for Centrica going out to 2024, and you can see them free on our platform here.

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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.