Some Analysts Just Cut Their Osisko Gold Royalties Ltd (TSE:OR) Estimates
The analysts covering Osisko Gold Royalties Ltd (TSE:OR) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. At CA$16.48, shares are up 6.7% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.
Following the downgrade, the most recent consensus for Osisko Gold Royalties from its four analysts is for revenues of CA$243m in 2021 which, if met, would be a notable 14% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing CA$271m of revenue in 2021. The consensus view seems to have become more pessimistic on Osisko Gold Royalties, noting the substantial drop in revenue estimates in this update.
Check out our latest analysis for Osisko Gold Royalties
There was no particular change to the consensus price target of CA$22.64, with Osisko Gold Royalties' latest outlook seemingly not enough to result in a change of valuation. 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. Currently, the most bullish analyst values Osisko Gold Royalties at CA$28.50 per share, while the most bearish prices it at CA$18.50. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Osisko Gold Royalties' revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 29% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.8% annually. Even after the forecast slowdown in growth, it seems obvious that Osisko Gold Royalties is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Osisko Gold Royalties after today.
But wait - there's more! At least one of Osisko Gold Royalties' four analysts has provided estimates out to 2022, which can be seen for 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 that insiders are buying.
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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