Yahoo Finance Here's What Analysts Are Forecasting For Antofagasta plc (LON:ANTO) After Its Yearly Results
It's been a good week for Antofagasta plc (LON:ANTO) shareholders, because the company has just released its latest yearly results, and the shares gained 7.8% to UK£6.60. Revenues of US$5.0b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.51, missing estimates by 4.6%. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Antofagasta
Taking into account the latest results, the current consensus, from the 13 analysts covering Antofagasta, is for revenues of US$4.80b in 2020, which would reflect a measurable 3.4% reduction in Antofagasta's sales over the past 12 months. Statutory earnings per share are forecast to tumble 27% to US$0.37 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$4.81b and earnings per share (EPS) of US$0.46 in 2020. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$11.42, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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 Antofagasta analyst has a price target of US$14.38 per share, while the most pessimistic values it at US$9.16. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Antofagasta's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 3.4% revenue decline a notable change from historical growth of 5.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 0.7% annually for the foreseeable future. It's pretty clear that Antofagasta's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Antofagasta's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$11.42, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Antofagasta analysts - going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Antofagasta you should be aware of.
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