What You Need To Know About The Public Power Corporation S.A. (ATH:PPC) Analyst Downgrade Today

Today is shaping up negative for Public Power Corporation S.A. (ATH:PPC) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the three analysts covering Public Power are now predicting revenues of €7.8b in 2024. If met, this would reflect a modest 2.2% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to tumble 27% to €0.83 in the same period. Previously, the analysts had been modelling revenues of €9.9b and earnings per share (EPS) of €0.88 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a sizeable cut to revenue estimates and a small dip in earnings per share numbers as well.

View our latest analysis for Public Power

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Public Power's revenue growth is expected to slow, with the forecast 2.9% annualised growth rate until the end of 2024 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) 1.1% per year. So it's pretty clear that, while Public Power's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Public Power after today.

Worse, Public Power is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. See why we're concerned about Public Power's balance sheet by visiting our risks dashboard for free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months 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.