Stock Analysis

Rainbows and Unicorns: OMV Petrom S.A. (BVB:SNP) Analysts Just Became A Lot More Optimistic

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Celebrations may be in order for OMV Petrom S.A. (BVB:SNP) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the latest consensus from OMV Petrom's five analysts is for revenues of RON41b in 2022, which would reflect a notable 12% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 34% to RON0.15. Before this latest update, the analysts had been forecasting revenues of RON30b and earnings per share (EPS) of RON0.12 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for OMV Petrom

BVB:SNP Earnings and Revenue Growth September 18th 2022

With these upgrades, we're not surprised to see that the analysts have lifted their price target 13% to RON0.62 per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on OMV Petrom, with the most bullish analyst valuing it at RON0.88 and the most bearish at RON0.44 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. The analysts are definitely expecting OMV Petrom's growth to accelerate, with the forecast 26% annualised growth to the end of 2022 ranking favourably alongside historical growth of 8.0% 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 7.6% annually. It seems obvious that as part of the brighter growth outlook, OMV Petrom is expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at OMV Petrom.

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 OMV Petrom going out to 2024, and you can see them 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.

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

Find out whether OMV Petrom 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.