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Analysts Are Updating Their Ramelius Resources Limited (ASX:RMS) Estimates After Its Half-Yearly Results

The interim results for Ramelius Resources Limited (ASX:RMS) were released last week, making it a good time to revisit its performance. Ramelius Resources reported in line with analyst predictions, delivering revenues of AU$305m and statutory earnings per share of AU$0.015, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Ramelius Resources

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earnings-and-revenue-growth

After the latest results, the seven analysts covering Ramelius Resources are now predicting revenues of AU$662.6m in 2023. If met, this would reflect a solid 11% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Ramelius Resources forecast to report a statutory profit of AU$0.077 per share. In the lead-up to this report, the analysts had been modelling revenues of AU$649.0m and earnings per share (EPS) of AU$0.079 in 2023. So it's pretty clear consensus is mixed on Ramelius Resources after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.

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There's been no major changes to the price target of AU$1.31, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. 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. The most optimistic Ramelius Resources analyst has a price target of AU$1.50 per share, while the most pessimistic values it at AU$1.10. This shows there is still a bit of 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.

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 Ramelius Resources' growth to accelerate, with the forecast 23% annualised growth to the end of 2023 ranking favourably alongside historical growth of 17% per annum 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 0.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ramelius Resources to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ramelius Resources. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Ramelius Resources going out to 2025, and you can see them free on our platform here..

You can also see our analysis of Ramelius Resources' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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.

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