As you might know, St Barbara Limited (ASX:SBM) last week released its latest half-year, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at AU$362m, statutory earnings missed forecasts by an incredible 34%, coming in at just AU$0.055 per share. Following the result, 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on St Barbara after the latest results.

Check out our latest analysis for St Barbara

After the latest results, the six analysts covering St Barbara are now predicting revenues of AU$808.7m in 2020. If met, this would reflect a notable 19% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to jump 33% to AU$0.21. Yet prior to the latest earnings, analysts had been forecasting revenues of AU$798.0m and earnings per share (EPS) of AU$0.21 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of AU$3.22, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock'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. Currently, the most bullish analyst values St Barbara at AU$3.70 per share, while the most bearish prices it at AU$2.50. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

In addition, we can look to St Barbara's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. It's clear from the latest estimates that St Barbara's rate of growth is expected to accelerate meaningfully, with forecast 19% revenue growth noticeably faster than its historical growth of 4.7%p.a. 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 0.6% per year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect St Barbara to grow faster than the wider market.

The Bottom Line

The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around St Barbara's earnings potential next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that St Barbara's revenues are expected to grow faster than the wider market. 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.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for St Barbara going out to 2022, and you can see them free on our platform here..

You can also view our analysis of St Barbara's balance sheet, and whether we think St Barbara is carrying too much debt, for free on our platform here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.