Need To Know: Analysts Are Much More Bullish On Ciech S.A. (WSE:CIE) Revenues

Celebrations may be in order for Ciech S.A. (WSE:CIE) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

After this upgrade, Ciech's six analysts are now forecasting revenues of zł5.1b in 2022. This would be a major 21% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing zł4.7b of revenue in 2022. The consensus has definitely become more optimistic, showing a nice gain to revenue forecasts.

Check out the opportunities and risks within the PL Chemicals industry.

The consensus price target fell 7.7% to zł44.88, with the analysts clearly less optimistic about Ciech's valuation following this update. 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. The most optimistic Ciech analyst has a price target of zł58.00 per share, while the most pessimistic values it at zł37.60. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Ciech shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. For example, we noticed that Ciech's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 47% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 0.8% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 2.8% per year. Not only are Ciech's revenues expected to improve, it seems that the analysts are also expecting it 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. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Ciech.

Analysts are clearly in love with Ciech at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as a weak balance sheet. For more information, you can click through to our platform to learn more about this and the 2 other concerns we've identified .

You can also see our analysis of Ciech's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.