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Investors in IGO Limited (ASX:IGO) had a good week, as its shares rose 6.3% to close at AU$5.55 following the release of its yearly results. Revenue of AU$841m surpassed estimates by 2.6%, although statutory earnings per share missed badly, coming in 99% below expectations at AU$0.0037 per share. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
See our latest analysis for IGO
Following the recent earnings report, the consensus from 15 analysts covering IGO is for revenues of AU$516.5m in 2025. This implies a concerning 39% decline in revenue compared to the last 12 months. Per-share earnings are expected to jump 6,050% to AU$0.23. Before this earnings report, the analysts had been forecasting revenues of AU$549.5m and earnings per share (EPS) of AU$0.26 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.
The analysts made no major changes to their price target of AU$6.21, suggesting the downgrades are not expected to have a long-term impact on IGO's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on IGO, with the most bullish analyst valuing it at AU$8.50 and the most bearish at AU$4.55 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. We would highlight that revenue is expected to reverse, with a forecast 39% annualised decline to the end of 2025. That is a notable change from historical growth of 6.5% 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 1.2% per year. It's pretty clear that IGO'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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at AU$6.21, with the latest estimates not enough to have an impact on their price targets.