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Stanmore Resources Limited (ASX:SMR) shareholders are probably feeling a little disappointed, since its shares fell 8.0% to AU$2.97 in the week after its latest half-yearly results. It was a credible result overall, with revenues of US$1.3b and statutory earnings per share of US$0.54 both in line with analyst estimates, showing that Stanmore Resources is executing in line with expectations. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Stanmore Resources
Taking into account the latest results, the four analysts covering Stanmore Resources provided consensus estimates of US$2.41b revenue in 2024, which would reflect a small 4.9% decline over the past 12 months. Statutory earnings per share are predicted to increase 2.5% to US$0.31. In the lead-up to this report, the analysts had been modelling revenues of US$2.47b and earnings per share (EPS) of US$0.28 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.
There's been no real change to the average price target of AU$3.95, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Stanmore Resources analyst has a price target of AU$4.80 per share, while the most pessimistic values it at AU$3.35. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 9.6% annualised decline to the end of 2024. That is a notable change from historical growth of 49% 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 - Stanmore Resources is expected to lag the wider industry.