Syrah Resources Limited (ASX:SYR) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. The stock price has risen 5.5% to AU$1.06 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

Following the upgrade, the latest consensus from Syrah Resources' dual analysts is for revenues of US$44m in 2021, which would reflect a substantial 308% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$36m of revenue in 2021. The consensus has definitely become more optimistic, showing a very substantial lift in revenue forecasts.

See our latest analysis for Syrah Resources

The consensus price target rose 11% to AU$1.03, with the analysts clearly more optimistic about Syrah Resources' prospects following this update. 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 Syrah Resources at AU$1.25 per share, while the most bearish prices it at AU$0.80. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Syrah Resources' rate of growth is expected to accelerate meaningfully, with the forecast 3x annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 56% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 2.2% per year. It seems obvious that as part of the brighter growth outlook, Syrah Resources is expected to grow faster than the wider industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Syrah Resources this year. They're also forecasting for revenues to perform better than companies in the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Syrah Resources.

Need some more information? We have analyst estimates for Syrah Resources going out to 2023, and you can see them 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.

This article by Simply Wall St is general in nature. 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.

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