Yahoo Finance Capstone Copper Corp. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
It's been a good week for Capstone Copper Corp. (TSE:CS) shareholders, because the company has just released its latest yearly results, and the shares gained 6.0% to CA$6.03. It looks like a pretty bad result, all things considered. Although revenues of US$1.3b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 39% to hit US$0.19 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for Capstone Copper
Taking into account the latest results, the current consensus from Capstone Copper's ten analysts is for revenues of US$1.46b in 2023, which would reflect a decent 12% increase on its sales over the past 12 months. Statutory earnings per share are forecast to dive 32% to US$0.12 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.49b and earnings per share (EPS) of US$0.097 in 2023. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the very substantial lift in to the earnings per share numbers.
There's been no real change to the average price target of CA$7.17, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Capstone Copper analyst has a price target of CA$8.50 per share, while the most pessimistic values it at CA$6.00. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Capstone Copper's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% annually. So it's pretty clear that, while Capstone Copper's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Capstone Copper's earnings potential next year. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at CA$7.17, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Capstone Copper analysts - going out to 2025, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 4 warning signs for Capstone Copper (of which 2 don't sit too well with us!) you should know about.
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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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