Earnings Update: Bank Millennium S.A. (WSE:MIL) Just Reported Its Interim Results And Analysts Are Updating Their Forecasts

Bank Millennium S.A. (WSE:MIL) last week reported its latest half-yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. The result was fairly weak overall, with revenues of zł1.3b being 4.5% less than what the analysts had been modelling. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Bank Millennium

Taking into account the latest results, the consensus forecast from Bank Millennium's four analysts is for revenues of zł5.66b in 2022, which would reflect a huge 34% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 61% to zł0.35. Yet prior to the latest earnings, the analysts had been forecasting revenues of zł5.21b and losses of zł0.17 per share in 2022. While this year's revenue estimates increased, there was also a massive increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

There was no major change to the consensus price target of zł6.24, with growing revenues seemingly enough to offset the concern of growing losses. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Bank Millennium, with the most bullish analyst valuing it at zł10.20 and the most bearish at zł4.90 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 Millennium's rate of growth is expected to accelerate meaningfully, with the forecast 80% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 11% 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 4.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Bank Millennium is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Bank Millennium. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at zł6.24, with the latest estimates not enough to have an impact on their price targets.

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 Millennium going out to 2024, and you can see them 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.