News Flash: Analysts Just Made A Meaningful Upgrade To Their Pharma Mar, S.A. (BME:PHM) Forecasts

By
Simply Wall St
Published
August 03, 2021
BME:PHM
Source: Shutterstock

Shareholders in Pharma Mar, S.A. (BME:PHM) 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 Pharma Mar will make substantially more sales than they'd previously expected.

Following the upgrade, the most recent consensus for Pharma Mar from its six analysts is for revenues of €237m in 2021 which, if met, would be a solid 19% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to plummet 42% to €4.36 in the same period. Previously, the analysts had been modelling revenues of €206m and earnings per share (EPS) of €3.97 in 2021. The most recent forecasts are noticeably more optimistic, with a nice gain to revenue estimates and a lift to earnings per share as well.

Check out our latest analysis for Pharma Mar

earnings-and-revenue-growth
BME:PHM Earnings and Revenue Growth August 4th 2021

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of €109, 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. Currently, the most bullish analyst values Pharma Mar at €146 per share, while the most bearish prices it at €90.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Pharma Mar shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Pharma Mar's rate of growth is expected to accelerate meaningfully, with the forecast 41% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 3.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 23% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Pharma Mar 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. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Pharma Mar.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Pharma Mar going out to 2023, and you can see them free on our platform here..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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