PGE Polska Grupa Energetyczna S.A. (WSE:PGE) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

PGE Polska Grupa Energetyczna S.A. (WSE:PGE) shareholders are probably feeling a little disappointed, since its shares fell 9.9% to zł6.70 in the week after its latest quarterly results. The result was fairly weak overall, with revenues of zł17b being 7.7% less than what the analysts had been modelling. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for PGE Polska Grupa Energetyczna

Taking into account the latest results, the four analysts covering PGE Polska Grupa Energetyczna provided consensus estimates of zł71.1b revenue in 2024, which would reflect a chunky 17% decline over the past 12 months. Earnings are expected to improve, with PGE Polska Grupa Energetyczna forecast to report a statutory profit of zł0.34 per share. Before this earnings report, the analysts had been forecasting revenues of zł71.7b and earnings per share (EPS) of zł1.56 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at zł10.20, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values PGE Polska Grupa Energetyczna at zł16.00 per share, while the most bearish prices it at zł5.60. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 22% annualised decline to the end of 2024. That is a notable change from historical 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 1.1% annually for the foreseeable future. It's pretty clear that PGE Polska Grupa Energetyczna's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for PGE Polska Grupa Energetyczna. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that PGE Polska Grupa Energetyczna's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for PGE Polska Grupa Energetyczna going out to 2026, and you can see them free on our platform here..

It might also be worth considering whether PGE Polska Grupa Energetyczna's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.