Upgrade: Analysts Just Made A Sizeable Increase To Their PowerCell Sweden AB (publ) (STO:PCELL) Forecasts

Shareholders in PowerCell Sweden AB (publ) (STO:PCELL) 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 the analysts modelling a real improvement in business performance.

Following the upgrade, the current consensus from PowerCell Sweden's four analysts is for revenues of kr350m in 2023 which - if met - would reflect a sizeable 43% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching kr1.50 per share. However, before this estimates update, the consensus had been expecting revenues of kr293m and kr1.70 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

View our latest analysis for PowerCell Sweden

The consensus price target rose 5.2% to kr167, with the analysts encouraged by the higher revenue and lower forecast losses for this year. 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. There are some variant perceptions on PowerCell Sweden, with the most bullish analyst valuing it at kr215 and the most bearish at kr135 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that PowerCell Sweden's rate of growth is expected to accelerate meaningfully, with the forecast 43% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 34% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 25% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect PowerCell Sweden to grow faster than the wider industry.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting PowerCell Sweden is moving incrementally towards profitability. Fortunately, analysts 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 PowerCell Sweden.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for PowerCell Sweden going out to 2025, 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.

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.