Yahoo Finance Analysts Are Betting On Pennon Group Plc (LON:PNN) With A Big Upgrade This Week
Celebrations may be in order for Pennon Group Plc (LON:PNN) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.
Following the upgrade, the most recent consensus for Pennon Group from its eight analysts is for revenues of UK£1.1b in 2025 which, if met, would be a sizeable 20% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of UK£943m in 2025. It looks like there's been a clear increase in optimism around Pennon Group, given the nice gain to revenue forecasts.
See our latest analysis for Pennon Group
We'd point out that there was no major changes to their price target of UK£7.94, suggesting the latest estimates were not enough to shift their view on the value of the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Pennon Group's past performance and to peers in the same industry. It's clear from the latest estimates that Pennon Group's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 13% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.2% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Pennon Group to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Pennon Group.
Analysts are clearly in love with Pennon Group at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as 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 risk we've identified .
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 with high insider ownership.
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.
