News Flash: Analysts Just Made A Captivating Upgrade To Their Telecom Plus Plc (LON:TEP) Forecasts

Telecom Plus Plc (LON:TEP) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. Investor sentiment seems to be improving too, with the share price up 9.2% to UK£24.90 over the past 7 days. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

After this upgrade, Telecom Plus' three analysts are now forecasting revenues of UK£2.6b in 2023. This would be a huge 122% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of UK£2.1b in 2023. It looks like there's been a clear increase in optimism around Telecom Plus, given the chunky increase in revenue forecasts.

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There was no particular change to the consensus price target of UK£26.67, with Telecom Plus' latest outlook seemingly not enough to result in a change of 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 Telecom Plus at UK£31.50 per share, while the most bearish prices it at UK£22.50. 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 Telecom Plus shareholders.

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. It's clear from the latest estimates that Telecom Plus' rate of growth is expected to accelerate meaningfully, with the forecast 4x annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 6.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 0.8% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Telecom Plus to grow faster than the wider industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Telecom Plus this year. They're also forecasting more rapid revenue growth 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 Telecom Plus.

Unanswered questions? At least one of Telecom Plus' three analysts has provided estimates out to 2025, which can be seen for 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.