Bank Millennium S.A. (WSE:MIL) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.
After this upgrade, Bank Millennium's six analysts are now forecasting revenues of zł3.6b in 2021. This would be a solid 11% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of zł3.2b in 2021. It looks like there's been a clear increase in optimism around Bank Millennium, given the nice increase in revenue forecasts.
The consensus price target rose 7.6% to zł4.09, with the analysts clearly more optimistic about Bank Millennium's prospects following this update. 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 Millennium analyst has a price target of zł7.70 per share, while the most pessimistic values it at zł2.43. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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. The analysts are definitely expecting Bank Millennium's growth to accelerate, with the forecast 15% annualised growth to the end of 2021 ranking favourably alongside historical growth of 9.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.7% annually. 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 take away from this upgrade is that analysts lifted their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Bank Millennium.
Of course, there's always more to the story. We have analyst estimates for Bank Millennium going out to 2023, and you can see them free on our platform here.
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 that insiders are buying.
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