Endeavour Silver Corp. (TSE:EDR) Just Reported, And Analysts Assigned A CA$3.63 Price Target
It's been a pretty great week for Endeavour Silver Corp. (TSE:EDR) shareholders, with its shares surging 15% to CA$2.89 in the week since its latest yearly results. Results were roughly in line with estimates, with revenues of US$205m and statutory earnings per share of US$0.031. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Endeavour Silver
Taking into account the latest results, the consensus forecast from Endeavour Silver's three analysts is for revenues of US$220.1m in 2024. This reflects an okay 7.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 129% to US$0.06. In the lead-up to this report, the analysts had been modelling revenues of US$217.0m and earnings per share (EPS) of US$0.02 in 2024. Although the revenue estimates have not really changed, we can see there's been a great increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
The average the analysts price target fell 15% to CA$3.63, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Endeavour Silver analyst has a price target of CA$3.75 per share, while the most pessimistic values it at CA$3.50. This is a very narrow spread of estimates, implying either that Endeavour Silver is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Endeavour Silver's revenue growth is expected to slow, with the forecast 7.1% annualised growth rate until the end of 2024 being well below the historical 14% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. Factoring in the forecast slowdown in growth, it seems obvious that Endeavour Silver is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Endeavour Silver following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Endeavour Silver's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Endeavour Silver analysts - going out to 2025, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Endeavour Silver (1 makes us a bit uncomfortable) you should be aware of.
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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.
