Analysts' Revenue Estimates For Pennon Group Plc (LON:PNN) Are Surging Higher

Celebrations may be in order for Pennon Group Plc (LON:PNN) 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 Pennon Group will make substantially more sales than they'd previously expected.

After this upgrade, Pennon Group's eight analysts are now forecasting revenues of UK£1.1b in 2025. This would be a substantial 20% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of UK£943m in 2025. The consensus has definitely become more optimistic, showing a nice increase in revenue forecasts.

View our latest analysis for Pennon Group

There was no particular change to the consensus price target of UK£7.94, with Pennon Group's latest outlook seemingly not enough to result in a change of 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. It's clear from the latest estimates that Pennon Group's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 13% 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 7.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Pennon Group to grow faster than 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. The analysts also expect revenues 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 Pennon Group.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential concern with Pennon Group, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 1 other concern 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.