Time To Worry? Analysts Just Downgraded Their Polenergia S.A. (WSE:PEP) Outlook

One thing we could say about the analysts on Polenergia S.A. (WSE:PEP) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the current consensus, from the three analysts covering Polenergia, is for revenues of zł5.0b in 2024, which would reflect a small 6.7% reduction in Polenergia's sales over the past 12 months. Before the latest update, the analysts were foreseeing zł5.5b of revenue in 2024. The consensus view seems to have become more pessimistic on Polenergia, noting the measurable cut to revenue estimates in this update.

See our latest analysis for Polenergia

There was no particular change to the consensus price target of zł88.56, with Polenergia's latest outlook seemingly not enough to result in a change of valuation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 8.8% by the end of 2024. This indicates a significant reduction from annual growth of 24% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Polenergia is expected to lag the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Polenergia this year. They're also anticipating slower revenue growth than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Polenergia after today.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Polenergia's business, like dilutive stock issuance over the past year. Learn more, and discover the 1 other concern we've identified, for 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 downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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

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.

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