The analysts covering Anglo Pacific Group plc (LON:APF) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the downgrade, the current consensus from Anglo Pacific Group's four analysts is for revenues of US$102m in 2022 which - if met - would reflect a solid 20% increase on its sales over the past 12 months. Statutory earnings per share are forecast to be US$0.17, approximately in line with the last 12 months. Previously, the analysts had been modelling revenues of US$114m and earnings per share (EPS) of US$0.25 in 2022. Indeed, we can see that the analysts are a lot more bearish about Anglo Pacific Group's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for Anglo Pacific Group
Analysts made no major changes to their price target of UK£2.28, suggesting the downgrades are not expected to have a long-term impact on Anglo Pacific Group's valuation. 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 Anglo Pacific Group analyst has a price target of UK£2.60 per share, while the most pessimistic values it at UK£1.90. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Anglo Pacific Group shareholders.
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. It's clear from the latest estimates that Anglo Pacific Group's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 8.0% 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 3.1% per year. So it's clear with the acceleration in growth, Anglo Pacific Group is expected to grow meaningfully faster than the wider industry.