Sherritt International Corporation (TSE:S) shareholders will have a reason to smile today, with the analysts 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. Investors have been pretty optimistic on Sherritt International too, with the stock up 12% to CA$0.41 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the latest consensus from Sherritt International's three analysts is for revenues of CA$173m in 2022, which would reflect a decent 9.7% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing CA$135m of revenue in 2022. The consensus has definitely become more optimistic, showing a great increase in revenue forecasts.

View our latest analysis for Sherritt International

We'd point out that there was no major changes to their price target of CA$0.95, suggesting the latest estimates were not enough to shift their view on the value of the business. 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 Sherritt International at CA$1.60 per share, while the most bearish prices it at CA$0.50. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. 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. For example, we noticed that Sherritt International's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 20% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 19% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 12% per year. Not only are Sherritt International's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Sherritt International this year. They're also forecasting more rapid revenue growth than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Sherritt International.