Yahoo Finance News Flash: Analysts Just Made A Captivating Upgrade To Their Contact Energy Limited (NZSE:CEN) Forecasts
Contact Energy Limited (NZSE:CEN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.
After this upgrade, Contact Energy's five analysts are now forecasting revenues of NZ$2.9b in 2024. This would be a solid 18% improvement in sales compared to the last 12 months. Per-share earnings are expected to accumulate 3.9% to NZ$0.38. Prior to this update, the analysts had been forecasting revenues of NZ$2.6b and earnings per share (EPS) of NZ$0.32 in 2024. 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 Contact Energy
Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of NZ$9.93, suggesting that the forecast performance does not have a long term impact on the company's valuation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Contact Energy's rate of growth is expected to accelerate meaningfully, with the forecast 39% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 0.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Contact Energy is expected to grow much faster than its 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, analysts 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 Contact Energy could be a good candidate for more research.
Analysts are definitely bullish on Contact Energy, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including the risk of cutting its dividend. For more information, you can click through to our platform to learn more about this and the 1 other warning sign we've identified .
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.
