Analysts Just Made An Incredible Upgrade To Their Trevali Mining Corporation (TSE:TV) Forecasts

Shareholders in Trevali Mining Corporation (TSE:TV) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

After this upgrade, Trevali Mining's six analysts are now forecasting revenues of US$359m in 2022. This would be a decent 12% improvement in sales compared to the last 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$0.41 in per-share earnings. Prior to this update, the analysts had been forecasting revenues of US$310m and earnings per share (EPS) of US$0.30 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for Trevali Mining

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$1.86, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. Currently, the most bullish analyst values Trevali Mining at US$4.96 per share, while the most bearish prices it at US$1.40. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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 Trevali Mining's rate of growth is expected to accelerate meaningfully, with the forecast 12% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 7.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Trevali Mining is expected to grow much 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster 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 Trevali Mining could be a good candidate for more research.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Trevali Mining analysts - going out to 2024, and you can see them 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.