Rainbows and Unicorns: The MCAN Mortgage Corporation (TSE:MKP) Analyst Just Became A Lot More Optimistic

MCAN Mortgage Corporation (TSE:MKP) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's statutory forecasts. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The stock price has risen 4.2% to CA$15.95 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?

Following the upgrade, the most recent consensus for MCAN Mortgage from its single analyst is for revenues of CA$127m in 2023 which, if met, would be a major 22% increase on its sales over the past 12 months. Statutory earnings per share are presumed to shoot up 46% to CA$2.65. Before this latest update, the analyst had been forecasting revenues of CA$111m and earnings per share (EPS) of CA$2.29 in 2023. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for MCAN Mortgage

It will come as no surprise to learn that the analyst has increased their price target for MCAN Mortgage 5.6% to CA$19.00 on the back of these upgrades.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that MCAN Mortgage's rate of growth is expected to accelerate meaningfully, with the forecast 30% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 11% p.a. 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 11% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect MCAN Mortgage to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at MCAN Mortgage.

The covering analyst is definitely bullish on MCAN Mortgage, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. For more information, you can click through to our platform to learn more about this and the 2 other risks we've identified .

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.