Titan Machinery Inc. (NASDAQ:TITN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory 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 Titan Machinery's three analysts is for revenues of US$1.6b in 2022 which - if met - would reflect a decent 10% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 60% to US$1.40. Prior to this update, the analysts had been forecasting revenues of US$1.4b and earnings per share (EPS) of US$1.34 in 2022. The most recent forecasts are noticeably more optimistic, with a solid increase in revenue estimates and a lift to earnings per share as well.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 19% to US$29.33 per share. 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 Titan Machinery at US$31.00 per share, while the most bearish prices it at US$23.00. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.
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. The analysts are definitely expecting Titan Machinery's growth to accelerate, with the forecast 10% annualised growth to the end of 2022 ranking favourably alongside historical growth of 1.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Titan Machinery 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. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Titan Machinery.
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 Titan Machinery going out to 2023, and you can see them free on our platform here..
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