Broker Revenue Forecasts For TORM plc (CPH:TRMD A) Are Surging Higher

Celebrations may be in order for TORM plc (CPH:TRMD A) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects. The market may be pricing in some blue sky too, with the share price gaining 11% to kr.94.00 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the latest consensus from TORM's four analysts is for revenues of US$879m in 2022, which would reflect a substantial 25% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$722m of revenue in 2022. It looks like there's been a clear increase in optimism around TORM, given the very substantial lift in revenue forecasts.

Check out our latest analysis for TORM

Additionally, the consensus price target for TORM increased 27% to US$16.86, showing a clear increase in optimism from the analysts involved. 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. There are some variant perceptions on TORM, with the most bullish analyst valuing it at US$139 and the most bearish at US$99.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. 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.

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. The analysts are definitely expecting TORM's growth to accelerate, with the forecast 34% annualised growth to the end of 2022 ranking favourably alongside historical growth of 0.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 2.2% annually. So it's clear with the acceleration in growth, TORM is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. Analysts also expect revenues to perform better than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at TORM.

Analysts are clearly in love with TORM at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as dilutive stock issuance over the past year. You can learn more, and discover the 2 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.