Analysts Just Shipped A Substantial Upgrade To Their Bank Handlowy w Warszawie S.A. (WSE:BHW) Estimates

Shareholders in Bank Handlowy w Warszawie S.A. (WSE:BHW) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.

After this upgrade, Bank Handlowy w Warszawie's six analysts are now forecasting revenues of zł3.7b in 2023. This would be a solid 18% improvement in sales compared to the last 12 months. Per-share earnings are expected to climb 12% to zł10.44. Previously, the analysts had been modelling revenues of zł3.3b and earnings per share (EPS) of zł7.90 in 2023. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Our analysis indicates that BHW is potentially undervalued!

Despite these upgrades, the analysts have not made any major changes to their price target of zł74.35, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. The most optimistic Bank Handlowy w Warszawie analyst has a price target of zł76.60 per share, while the most pessimistic values it at zł69.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Bank Handlowy w Warszawie's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 6.4% 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 3.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Bank Handlowy w Warszawie is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for next year, expecting improving business conditions. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Bank Handlowy w Warszawie could be a good candidate for more research.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Bank Handlowy w Warszawie going out to 2024, and you can see them free on our platform here..

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.