The underlying tendency is to the upside for shares in PGE Polska Grupa Energetyczna S.A. and the timing is opportune to get back into the stock. A comeback of the upward dynamic can be anticipated. Investors have an opportunity to buy the stock and target the PLN 10.9.
Summary
The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
The company presents an interesting fundamental situation from a short-term investment perspective.
Strengths
Its core activity has a significant growth potential and sales are expected to surge, according to Standard & Poor's' forecast. Indeed, those may increase by 81% by 2024.
Its low valuation, with P/E ratio at 5.77 and 4.59 for the ongoing fiscal year and 2023 respectively, makes the stock pretty attractive with regard to earnings multiples.
The stock, which is currently worth 2022 to 0.32 times its sales, is clearly overvalued in comparison with peers.
The company appears to be poorly valued given its net asset value.
Over the last twelve months, the sales forecast has been frequently revised upwards.
Upward revisions of sales forecast reflect a renewed optimism among the analysts covering the stock.
For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner.
For the last 4 months, the company has been enjoying highly positive EPS revisions, which were frequently and significantly raised.
Analysts have a positive opinion on this stock. Average consensus recommends overweighting or purchasing the stock.
The difference between current prices and the average target price is rather important and implies a significant appreciation potential for the stock.
The average price target of analysts who are interested in the stock has been strongly revised upwards over the last four months.
Over the past twelve months, analysts' opinions have been strongly revised upwards.
Weaknesses
The company's currently anticipated earnings per share (EPS) growth for the next few years is a notable weakness.
The company is not the most generous with respect to shareholders' compensation.
Prospects from analysts covering the stock are not consistent. Such dispersed sales estimates confirm the poor visibility into the group's activity.
The company's earnings releases usually do not meet expectations.
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