Analysts Just Made A Significant Upgrade To Their Altius Minerals Corporation (TSE:ALS) Forecasts

Celebrations may be in order for Altius Minerals Corporation (TSE:ALS) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. 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 4.6% over the past week, closing at CA$25.13. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the current consensus from Altius Minerals' four analysts is for revenues of CA$98m in 2022 which - if met - would reflect a solid 20% increase on its sales over the past 12 months. Statutory earnings per share are presumed to expand 15% to CA$0.96. Previously, the analysts had been modelling revenues of CA$88m and earnings per share (EPS) of CA$0.82 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Altius Minerals

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of CA$27.21, suggesting that the forecast performance does not have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Altius Minerals, with the most bullish analyst valuing it at CA$31.00 and the most bearish at CA$22.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Altius Minerals' past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Altius Minerals'historical trends, as the 20% annualised revenue growth to the end of 2022 is roughly in line with the 19% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So it's pretty clear that Altius Minerals is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Altius Minerals could be a good candidate for more research.

Analysts are definitely bullish on Altius Minerals, 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. You can learn more, and discover the 3 other risks 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.