Bullish: Analysts Just Made A Huge Upgrade To Their Mithra Pharmaceuticals SA (EBR:MITRA) Forecasts

Celebrations may be in order for Mithra Pharmaceuticals SA (EBR:MITRA) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following the upgrade, the most recent consensus for Mithra Pharmaceuticals from its four analysts is for revenues of €200m in 2022 which, if met, would be a sizeable increase on its sales over the past 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of €2.68 per share this year. Prior to this update, the analysts had been forecasting revenues of €157m and earnings per share (EPS) of €1.44 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for Mithra Pharmaceuticals

Despite these upgrades, the analysts have not made any major changes to their price target of €25.23, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. The most optimistic Mithra Pharmaceuticals analyst has a price target of €31.00 per share, while the most pessimistic values it at €19.90. 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 Mithra Pharmaceuticals shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Mithra Pharmaceuticals' past performance and to peers in the same industry. The analysts are definitely expecting Mithra Pharmaceuticals' growth to accelerate, with the forecast 8x annualised growth to the end of 2022 ranking favourably alongside historical growth of 2.8% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Mithra Pharmaceuticals 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Mithra Pharmaceuticals.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential risk with Mithra Pharmaceuticals, including dilutive stock issuance over the past year. You can learn more, and discover the 1 other risk 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.