Yahoo Finance Analysts Have Made A Financial Statement On OceanaGold Corporation's (TSE:OGC) First-Quarter Report
Shareholders might have noticed that OceanaGold Corporation (TSE:OGC) filed its quarterly result this time last week. The early response was not positive, with shares down 9.7% to CA$2.05 in the past week. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 2.6%to hit US$149m. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on OceanaGold after the latest results.
See our latest analysis for OceanaGold
Following the latest results, OceanaGold's nine analysts are now forecasting revenues of US$655.8m in 2021. This would be a sizeable 28% improvement in sales compared to the last 12 months. Earnings are expected to improve, with OceanaGold forecast to report a statutory profit of US$0.092 per share. Before this earnings report, the analysts had been forecasting revenues of US$655.8m and earnings per share (EPS) of US$0.11 in 2021. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.
The consensus price target held steady at US$2.39, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 OceanaGold analyst has a price target of US$4.69 per share, while the most pessimistic values it at US$1.71. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. 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. For example, we noticed that OceanaGold's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 40% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 2.2% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 6.0% per year. Not only are OceanaGold's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for OceanaGold. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$2.39, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple OceanaGold analysts - going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for OceanaGold that you should be aware of.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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