Upgrade: Analysts Just Made A Sizeable Increase To Their Theravance Biopharma, Inc. (NASDAQ:TBPH) Forecasts

Celebrations may be in order for Theravance Biopharma, Inc. (NASDAQ:TBPH) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market may be pricing in some blue sky too, with the share price gaining 14% to US$11.29 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the latest consensus from Theravance Biopharma's eight analysts is for revenues of US$65m in 2023, which would reflect a huge 27% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 71% to US$0.31. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$59m and losses of US$0.40 per share in 2023. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

Check out the opportunities and risks within the US Pharmaceuticals industry.

The consensus price target rose 9.9% to US$11.62, with the analysts encouraged by the higher revenue and lower forecast losses for next year. 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 Theravance Biopharma at US$19.00 per share, while the most bearish prices it at US$8.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Theravance Biopharma's past performance and to peers in the same industry. It's clear from the latest estimates that Theravance Biopharma's rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 12% 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 4.0% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Theravance Biopharma to grow faster than the wider industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for next year, reflecting increased optimism around Theravance Biopharma's prospects. They also upgraded their revenue estimates for next year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Theravance Biopharma.

Better yet, Theravance Biopharma is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. For more information, you can click through to our free platform to learn more about these forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.