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One thing we could say about the analysts on IGO Limited (ASX:IGO) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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 consensus from 14 analysts covering IGO is for revenues of AU$544m in 2025, implying a stressful 41% decline in sales compared to the last 12 months. Per-share earnings are expected to rise 6.8% to AU$0.32. Previously, the analysts had been modelling revenues of AU$663m and earnings per share (EPS) of AU$0.35 in 2025. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a considerable drop in earnings per share numbers as well.
Check out our latest analysis for IGO
It'll come as no surprise then, to learn that the analysts have cut their price target 7.9% to AU$6.37.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 41% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 6.6% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue decline 0.4% annually for the foreseeable future. So it's pretty clear that IGO's revenues are expected to shrink faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately they also cut their revenue estimates for this year, and they expect sales to lag the wider market. That said, earnings per share are more important for creating value for shareholders. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of IGO.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple IGO analysts - going out to 2027, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.