Champion Iron Limited (ASX:CIA) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Investors in Champion Iron Limited (ASX:CIA) had a good week, as its shares rose 4.8% to close at AU$6.14 following the release of its interim results. Champion Iron reported in line with analyst predictions, delivering revenues of CA$818m and statutory earnings per share of CA$0.19, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Champion Iron after the latest results.

View our latest analysis for Champion Iron

Following the latest results, Champion Iron's twelve analysts are now forecasting revenues of CA$1.69b in 2025. This would be an okay 2.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to shrink 8.7% to CA$0.45 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CA$1.81b and earnings per share (EPS) of CA$0.51 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

The analysts made no major changes to their price target of AU$7.51, suggesting the downgrades are not expected to have a long-term impact on Champion Iron's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Champion Iron at AU$8.65 per share, while the most bearish prices it at AU$6.80. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 Champion Iron's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.5% growth on an annualised basis. This is compared to a historical growth rate of 13% 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) 2.4% per year. Even after the forecast slowdown in growth, it seems obvious that Champion Iron is also expected to grow faster than 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 Champion Iron. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Champion Iron going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Champion Iron has 1 warning sign we think 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.