In This Article:
Last week saw the newest annual earnings release from Bowen Coking Coal Limited (ASX:BCB), an important milestone in the company's journey to build a stronger business. Revenues fell 7.9% short of expectations, at AU$450m. Earnings correspondingly dipped, with Bowen Coking Coal reporting a statutory loss of AU$0.037 per share, whereas the analysts had previously modelled a profit in this period. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Bowen Coking Coal
Taking into account the latest results, the current consensus, from the three analysts covering Bowen Coking Coal, is for revenues of AU$418.0m in 2025. This implies a measurable 7.2% reduction in Bowen Coking Coal's revenue over the past 12 months. Bowen Coking Coal is also expected to turn profitable, with statutory earnings of AU$0.008 per share. In the lead-up to this report, the analysts had been modelling revenues of AU$654.0m and earnings per share (EPS) of AU$0.059 in 2025. It looks like sentiment has declined substantially in the aftermath of these results, with a pretty serious reduction to revenue estimates and a pretty serious reduction to earnings per share numbers as well.
It'll come as no surprise then, to learn that the analysts have cut their price target 22% to AU$0.22. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Bowen Coking Coal analyst has a price target of AU$0.40 per share, while the most pessimistic values it at AU$0.05. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
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. We would highlight that revenue is expected to reverse, with a forecast 7.2% annualised decline to the end of 2025. That is a notable change from historical growth of 86% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.7% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Bowen Coking Coal is expected to lag the wider industry.