Investors in Lubelski Wegiel Bogdanka S.A. (WSE:LWB) had a good week, as its shares rose 2.1% to close at zł54.60 following the release of its first-quarter results. Lubelski Wegiel Bogdanka reported in line with analyst predictions, delivering revenues of zł732m and statutory earnings per share of zł8.48, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Lubelski Wegiel Bogdanka

Following the recent earnings report, the consensus from three analysts covering Lubelski Wegiel Bogdanka is for revenues of zł2.46b in 2022, implying a small 3.3% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to tumble 44% to zł6.20 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of zł2.45b and earnings per share (EPS) of zł5.88 in 2022. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There’s been no major changes to the consensus price target of zł67.23, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock’s valuation. 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 Lubelski Wegiel Bogdanka analyst has a price target of zł74.70 per share, while the most pessimistic values it at zł61.00. This is a very narrow spread of estimates, implying either that Lubelski Wegiel Bogdanka is an easy company to value, or – more likely – the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Lubelski Wegiel Bogdanka’s past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 4.3% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 5.1% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 3.3% per year. The forecasts do look bearish for Lubelski Wegiel Bogdanka, since they’re expecting it to shrink faster than the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Lubelski Wegiel Bogdanka’s earnings potential next year. The consensus also reconfirmed their revenue estimates, suggesting that sales are performing in line with expectations. Plus, our data suggests that Lubelski Wegiel Bogdanka is expected to perform worse than the wider industry. The consensus price target held steady at zł67.23, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have forecasts for Lubelski Wegiel Bogdanka going out to 2024, and you can see them free on our platform here.

We don’t want to rain on the parade too much, but we did also find 2 warning signs for Lubelski Wegiel Bogdanka (1 is a bit unpleasant!) that you need to be mindful 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.