Yahoo Finance Earnings Update: Resolute Mining Limited (ASX:RSG) Just Reported Its Yearly Results And Analysts Are Updating Their Forecasts
Shareholders might have noticed that Resolute Mining Limited (ASX:RSG) filed its annual result this time last week. The early response was not positive, with shares down 4.2% to AU$0.23 in the past week. The business exceeded revenue expectations with sales of US$651m coming in 4.5% ahead of forecasts. Statutory losses were US$0.028 a share, in line with what the analysts predicted. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Resolute Mining
Taking into account the latest results, the five analysts covering Resolute Mining provided consensus estimates of US$632.0m revenue in 2023, which would reflect a noticeable 2.9% decline on its sales over the past 12 months. Resolute Mining is also expected to turn profitable, with statutory earnings of US$0.01 per share. In the lead-up to this report, the analysts had been modelling revenues of US$611.1m and earnings per share (EPS) of US$0.011 in 2023. So it's pretty clear consensus is mixed on Resolute Mining after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.
The consensus price target was unchanged at AU$0.56, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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 Resolute Mining, with the most bullish analyst valuing it at AU$0.99 and the most bearish at AU$0.33 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. 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.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 2.9% by the end of 2023. This indicates a significant reduction from annual growth of 13% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 0.08% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Resolute Mining is expected to lag 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 Resolute Mining. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. The consensus price target held steady at AU$0.56, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Resolute Mining going out to 2025, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Resolute Mining you should know about.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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