Need To Know: Analysts Are Much More Bullish On Tharisa plc (JSE:THA) Revenues

Tharisa plc (JSE:THA) 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.

Following the upgrade, the most recent consensus for Tharisa from its four analysts is for revenues of US$628m in 2021 which, if met, would be a sizeable 55% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$547m in 2021. It looks like there's been a clear increase in optimism around Tharisa, given the solid increase in revenue forecasts.

See our latest analysis for Tharisa

We'd point out that there was no major changes to their price target of US$2.31, suggesting the latest estimates were not enough to shift their view on the value of the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Tharisa at US$35.25 per share, while the most bearish prices it at US$31.92. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Tharisa's rate of growth is expected to accelerate meaningfully, with the forecast 55% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Tharisa 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 lifted their revenue estimates for this year. The analysts also expect revenues 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 Tharisa.

Of course, there's always more to the story. At least one of Tharisa's four analysts has provided estimates out to 2024, 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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