Analysts Are Betting On Syrah Resources Limited (ASX:SYR) With A Big Upgrade This Week

Syrah Resources Limited (ASX:SYR) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. Investor sentiment seems to be improving too, with the share price up 5.5% to AU$1.06 over the past 7 days. Could this big upgrade push the stock even higher?

After this upgrade, Syrah Resources' dual analysts are now forecasting revenues of US$44m in 2021. This would be a huge 308% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$36m of revenue in 2021. The consensus has definitely become more optimistic, showing a very substantial lift in revenue forecasts.

View our latest analysis for Syrah Resources

Additionally, the consensus price target for Syrah Resources increased 11% to AU$1.03, showing a clear increase in optimism from the analysts involved. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Syrah Resources at AU$1.25 per share, while the most bearish prices it at AU$0.80. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Syrah Resources' past performance and to peers in the same industry. It's clear from the latest estimates that Syrah Resources' rate of growth is expected to accelerate meaningfully, with the forecast 3x annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 56% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 2.2% per year. So it's clear with the acceleration in growth, Syrah Resources is expected to grow meaningfully 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. The analysts also expect revenues to perform better than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Syrah Resources.

Want to learn more? At least one of Syrah Resources' dual analysts has provided estimates out to 2023, which can be seen 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. 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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