Growth Investors: Industry Analysts Just Upgraded Their Pharma Mar, S.A. (BME:PHM) Revenue Forecasts By 24%

Celebrations may be in order for Pharma Mar, S.A. (BME:PHM) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

Following the upgrade, the latest consensus from Pharma Mar's six analysts is for revenues of €238m in 2022, which would reflect a satisfactory 3.6% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to sink 16% to €4.31 in the same period. Prior to this update, the analysts had been forecasting revenues of €192m and earnings per share (EPS) of €4.19 in 2022. The most recent forecasts are noticeably more optimistic, with a chunky increase in revenue estimates and a lift to earnings per share as well.

View our latest analysis for Pharma Mar

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of €79.42, 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 Pharma Mar at €90.00 per share, while the most bearish prices it at €68.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Pharma Mar's revenue growth is expected to slow, with the forecast 4.8% annualised growth rate until the end of 2022 being well below the historical 6.4% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 23% per year. Factoring in the forecast slowdown in growth, it seems obvious that Pharma Mar is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Pharma Mar.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Pharma Mar 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.