Industry Analysts Just Upgraded Their Burford Capital Limited (LON:BUR) Revenue Forecasts By 15%

Burford Capital Limited (LON:BUR) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the current consensus from Burford Capital's three analysts is for revenues of US$455m in 2022 which - if met - would reflect a substantial 191% increase on its sales over the past 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of US$1.10 per share this year. Prior to this update, the analysts had been forecasting revenues of US$394m and earnings per share (EPS) of US$1.04 in 2022. The most recent forecasts are noticeably more optimistic, with a nice gain to revenue estimates and a lift to earnings per share as well.

See our latest analysis for Burford Capital

Despite these upgrades, the analysts have not made any major changes to their price target of US$12.42, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. The most optimistic Burford Capital analyst has a price target of US$13.34 per share, while the most pessimistic values it at US$6.42. 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 Burford Capital shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Burford Capital's past performance and to peers in the same industry. For example, we noticed that Burford Capital's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 191% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 2.9% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 15% annually. So it looks like Burford Capital is expected to grow faster than its competitors, at least for a while.

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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Burford Capital.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Burford Capital 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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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.