Catena Media plc (STO:CTM) shareholders will have a reason to smile today, with the covering analyst 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. The market may be pricing in some blue sky too, with the share price gaining 27% to kr38.94 in the last 7 days. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.
After this upgrade, Catena Media's single analyst is now forecasting revenues of €120m in 2021. This would be a solid 13% improvement in sales compared to the last 12 months. Before the latest update, the analyst was foreseeing €106m of revenue in 2021. The consensus has definitely become more optimistic, showing a nice increase in revenue forecasts.
The consensus price target rose 24% to €4.27, with the analyst clearly more optimistic about Catena Media's prospects following this update.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Catena Media's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 27% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 31% per year. Factoring in the forecast slowdown in growth, it seems obvious that Catena Media is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away from this upgrade is that the analyst lifted their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Catena Media could be worth investigating further.
Unsatisfied? We have estimates for Catena Media until 2023 from one covering analyst, and you can see them free on our platform here.
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