Centerra Gold Inc. (TSE:CG) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
Shareholders might have noticed that Centerra Gold Inc. (TSE:CG) filed its full-year result this time last week. The early response was not positive, with shares down 8.5% to CA$12.35 in the past week. Results were roughly in line with estimates, with revenues of US$1.7b and statutory earnings per share of US$1.39. 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.
View our latest analysis for Centerra Gold
Taking into account the latest results, the current consensus from Centerra Gold's eight analysts is for revenues of US$1.81b in 2021, which would reflect an okay 7.0% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 44% to US$2.00. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.01b and earnings per share (EPS) of US$2.25 in 2021. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share numbers.
The analysts made no major changes to their price target of US$15.32, suggesting the downgrades are not expected to have a long-term impact on Centerra Gold's valuation. 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 Centerra Gold at US$27.91 per share, while the most bearish prices it at US$15.40. 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.
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. It's pretty clear that there is an expectation that Centerra Gold's revenue growth will slow down substantially, with revenues next year expected to grow 7.0%, compared to a historical growth rate of 19% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.2% next year. So it's pretty clear that, while Centerra Gold's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
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. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at US$15.32, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Centerra Gold going out to 2025, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with Centerra Gold (including 1 which makes us a bit uncomfortable) .
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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