News Flash: Analysts Just Made A Stunning Upgrade To Their Zespól Elektrowni Patnów-Adamów-Konin S.A. (WSE:ZEP) Forecasts

Shareholders in Zespól Elektrowni Patnów-Adamów-Konin S.A. (WSE:ZEP) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

Following the upgrade, the most recent consensus for Zespól Elektrowni Patnów-Adamów-Konin from its twin analysts is for revenues of zł3.9b in 2022 which, if met, would be a solid 19% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting zł4.96 in per-share earnings. Prior to this update, the analysts had been forecasting revenues of zł3.0b and earnings per share (EPS) of zł4.30 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Our analysis indicates that ZEP is potentially overvalued!

It will come as no surprise to learn that the analysts have increased their price target for Zespól Elektrowni Patnów-Adamów-Konin 34% to zł26.75 on the back of these upgrades. 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 Zespól Elektrowni Patnów-Adamów-Konin analyst has a price target of zł28.90 per share, while the most pessimistic values it at zł24.60. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Zespól Elektrowni Patnów-Adamów-Konin is an easy business to forecast or the underlying assumptions are obvious.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zespól Elektrowni Patnów-Adamów-Konin's past performance and to peers in the same industry. The analysts are definitely expecting Zespól Elektrowni Patnów-Adamów-Konin's growth to accelerate, with the forecast 42% annualised growth to the end of 2022 ranking favourably alongside historical growth of 0.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 0.9% annually. So it's clear with the acceleration in growth, Zespól Elektrowni Patnów-Adamów-Konin is expected to grow meaningfully faster than the wider 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. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Zespól Elektrowni Patnów-Adamów-Konin could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2024, which can be seen 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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.