Party Time: Brokers Just Made Major Increases To Their Calibre Mining Corp. (TSE:CXB) Earnings Forecasts

Shareholders in Calibre Mining Corp. (TSE:CXB) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Calibre Mining will make substantially more sales than they'd previously expected. Investors have been pretty optimistic on Calibre Mining too, with the stock up 17% to CA$1.41 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

After this upgrade, Calibre Mining's five analysts are now forecasting revenues of US$418m in 2022. This would be a sizeable 31% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$403m of revenue in 2022. So there's been a pretty clear uptick in analyst sentiment after this consensus update, given the modest lift to next year's revenue forecasts.

See our latest analysis for Calibre Mining

There was no particular change to the consensus price target of CA$2.53, with Calibre Mining's latest outlook seemingly not enough to result in a change of valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Calibre Mining analyst has a price target of CA$2.55 per share, while the most pessimistic values it at CA$2.25. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Calibre Mining's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Calibre Mining's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 24% growth on an annualised basis. This is compared to a historical growth rate of 82% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.7% annually. So it's pretty clear that, while Calibre Mining's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for next year. They're also forecasting more rapid revenue growth 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 Calibre Mining could be a good candidate for more research.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential risk with Calibre Mining, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 1 other risk 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.