Earnings Update: Coronado Global Resources Inc. (ASX:CRN) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts
It's been a mediocre week for Coronado Global Resources Inc. (ASX:CRN) shareholders, with the stock dropping 12% to AU$1.09 in the week since its latest annual results. It was a pretty bad result overall; while revenues were in line with expectations at US$1.5b, statutory losses exploded to US$0.20 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Check out our latest analysis for Coronado Global Resources
Taking into account the latest results, the consensus forecast from Coronado Global Resources' seven analysts is for revenues of US$1.68b in 2021, which would reflect a notable 15% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Coronado Global Resources forecast to report a statutory profit of US$0.0061 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.71b and earnings per share (EPS) of US$0.042 in 2021. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
The consensus price target held steady at US$1.12, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Coronado Global Resources at US$1.81 per share, while the most bearish prices it at US$0.93. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Coronado Global Resources'historical trends, as next year's 15% revenue growth is roughly in line with 15% annual revenue growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 3.3% next year. So not only is Coronado Global Resources expected to maintain its revenue growth despite the wider downturn, it's also forecast to grow faster than the industry as a whole.
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. Fortunately, they also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations. Their estimates also suggest that Coronado Global Resources' revenues are expected to perform better than the wider industry. The consensus price target held steady at US$1.12, 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 forecasts for Coronado Global Resources going out to 2023, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for Coronado Global Resources (1 is a bit unpleasant!) that we have uncovered.
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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