Polenergia S.A. Recorded A 5.4% Miss On Revenue: Analysts Are Revisiting Their Models

Polenergia S.A. (WSE:PEP) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues came in 5.4% below expectations, at zł575m. Statutory earnings per share were relatively better off, with a per-share profit of zł2.43 being roughly in line with analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Polenergia after the latest results.

See our latest analysis for Polenergia

Following the latest results, Polenergia's four analysts are now forecasting revenues of zł2.40b in 2021. This would be a decent 13% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 24% to zł8.84. Before this earnings report, the analysts had been forecasting revenues of zł2.01b and earnings per share (EPS) of zł2.55 in 2021. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.

It will come as no surprise to learn that the analysts have increased their price target for Polenergia 6.2% to zł71.77on the back of these upgrades. 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. There are some variant perceptions on Polenergia, with the most bullish analyst valuing it at zł95.00 and the most bearish at zł47.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. One thing stands out from these estimates, which is that Polenergia is forecast to grow faster in the future than it has in the past, with revenues expected to display 29% annualised growth until the end of 2021. If achieved, this would be a much better result than the 8.3% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 9.6% annually. So it looks like Polenergia is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Polenergia following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Polenergia going out to 2023, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Polenergia that you need to be mindful of.

If you decide to trade Polenergia, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.