Yahoo Finance Broker Revenue Forecasts For SSE plc (LON:SSE) Are Surging Higher
SSE plc (LON:SSE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline.
Following the latest upgrade, SSE's 16 analysts currently expect revenues in 2024 to be UK£13b, approximately in line with the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of UK£1.54 per share this year. Prior to this update, the analysts had been forecasting revenues of UK£11b and earnings per share (EPS) of UK£1.50 in 2024. The forecasts seem more optimistic now, with a nice increase in revenue and a small lift in earnings per share estimates.
View our latest analysis for SSE
Despite these upgrades, the analysts have not made any major changes to their price target of UK£21.44, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 SSE at UK£25.00 per share, while the most bearish prices it at UK£17.85. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await SSE shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's also worth noting that the years of declining sales look to have come to an end, with the forecast for flat revenues to the end of 2024. Historically, SSE's sales have shrunk approximately 17% annually over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to fall 4.0% annually. Not only are SSE's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at SSE.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 4 potential concerns with SSE, including the risk of cutting its dividend. You can learn more, and discover the 2 other concerns we've identified, for free on our platform here.
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 that insiders are buying.
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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.
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