Analyst Estimates: Here’s What Brokers Think Of Pepco Group N.V. (WSE:PCO) After Its Half-Yearly Report
Last week, you might have seen that Pepco Group N.V. (WSE:PCO) released its interim result to the market. The early response was not positive, with shares down 10.0% to zł36.00 in the past week. Results were roughly in line with estimates, with revenues of €2.4b and statutory earnings per share of €0.27. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the seven analysts covering Pepco Group are now predicting revenues of €4.77b in 2022. If met, this would reflect an okay 6.1% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to expand 16% to €0.37. Yet prior to the latest earnings, the analysts had been anticipated revenues of €4.77b and earnings per share (EPS) of €0.38 in 2022. So it looks like there’s been a small decline in overall sentiment after the recent results – there’s been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
The consensus price target held steady at zł54.81, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Pepco Group at zł62.00 per share, while the most bearish prices it at zł44.00. 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.
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. It’s pretty clear that there is an expectation that Pepco Group’s revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 25% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.1% annually. So it’s pretty clear that, while Pepco Group’s revenue growth is expected to slow, it’s still expected to grow faster than the industry itself.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Pepco Group. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations – and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at zł54.81, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Pepco Group going out to 2024, and you can see them free on our platform here..
You still need to take note of risks, for example – Pepco Group has 1 warning sign we think you should be aware of.
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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.