Party Time: Brokers Just Made Major Increases To Their Mithra Pharmaceuticals SA (EBR:MITRA) Earnings Forecasts

Mithra Pharmaceuticals SA (EBR:MITRA) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market seems to be pricing in some improvement in the business too, with the stock up 6.2% over the past week, closing at €1.33. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the latest consensus from Mithra Pharmaceuticals' three analysts is for revenues of €93m in 2023, which would reflect a major 48% improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of €0.09 per share this year. Yet before this consensus update, the analysts had been forecasting revenues of €71m and losses of €0.64 per share in 2023. It looks like there's been a definite improvement in business conditions, with a revenue upgrade supposed to lead to profitability sooner than previously forecast.

Check out our latest analysis for Mithra Pharmaceuticals

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of €2.10, suggesting that the forecast performance does not have a long term impact on the company's valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Mithra Pharmaceuticals' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 120% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 9.0% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.2% per year. So it looks like Mithra Pharmaceuticals is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away from this upgrade is that the consensus now expects Mithra Pharmaceuticals to become profitable 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 5 potential concerns with Mithra Pharmaceuticals, including dilutive stock issuance over the past year. You can learn more, and discover the 3 other concerns we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.