Need To Know: Analysts Are Much More Bullish On PGE Polska Grupa Energetyczna S.A. (WSE:PGE)

Celebrations may be in order for PGE Polska Grupa Energetyczna S.A. (WSE:PGE) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The stock price has risen 5.7% to zł10.57 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?

Following the upgrade, the current consensus from PGE Polska Grupa Energetyczna's four analysts is for revenues of zł78b in 2022 which - if met - would reflect a substantial 34% increase on its sales over the past 12 months. Statutory earnings per share are supposed to plummet 23% to zł1.43 in the same period. Before this latest update, the analysts had been forecasting revenues of zł63b and earnings per share (EPS) of zł1.27 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for PGE Polska Grupa Energetyczna

With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.1% to zł12.78 per share. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on PGE Polska Grupa Energetyczna, with the most bullish analyst valuing it at zł14.30 and the most bearish at zł9.40 per share. 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 PGE Polska Grupa Energetyczna shareholders.

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 PGE Polska Grupa Energetyczna's rate of growth is expected to accelerate meaningfully, with the forecast 48% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 18% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that PGE Polska Grupa Energetyczna 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 upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at PGE Polska Grupa Energetyczna.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple PGE Polska Grupa Energetyczna analysts - going out to 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.