Stock Analysis

Rainbows and Unicorns: SNGN Romgaz SA (BVB:SNG) Analysts Just Became A Lot More Optimistic

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Celebrations may be in order for SNGN Romgaz SA (BVB:SNG) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. 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 current consensus from SNGN Romgaz's three analysts is for revenues of RON12b in 2022 which - if met - would reflect a sizeable 43% increase on its sales over the past 12 months. Per-share earnings are expected to leap 54% to RON9.74. Prior to this update, the analysts had been forecasting revenues of RON7.3b and earnings per share (EPS) of RON5.90 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 SNGN Romgaz

BVB:SNG Earnings and Revenue Growth June 15th 2022

Despite these upgrades, the analysts have not made any major changes to their price target of RON47.21, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. Currently, the most bullish analyst values SNGN Romgaz at RON48.00 per share, while the most bearish prices it at RON38.40. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that SNGN Romgaz's rate of growth is expected to accelerate meaningfully, with the forecast 61% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 5.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 3.8% annually. So it's clear with the acceleration in growth, SNGN Romgaz 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. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So SNGN Romgaz could be a good candidate for more research.

Using these estimates as a starting point, we've run a discounted cash flow calculation (DCF) on SNGN Romgaz that suggests the company could be somewhat undervalued. For more information, you can click through to our platform to learn more about our valuation approach.

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.

Valuation is complex, but we're helping make it simple.

Find out whether SNGN Romgaz is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.