New Forecasts: Here's What Analysts Think The Future Holds For Core Lithium Ltd (ASX:CXO)

Core Lithium Ltd (ASX:CXO) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance. The market seems to be pricing in some improvement in the business too, with the stock up 8.8% over the past week, closing at AU$0.37. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the current consensus from Core Lithium's nine analysts is for revenues of AU$447m in 2024 which - if met - would reflect a major increase on its sales over the past 12 months. Statutory earnings per share are presumed to surge 1,383% to AU$0.075. Prior to this update, the analysts had been forecasting revenues of AU$400m and earnings per share (EPS) of AU$0.066 in 2024. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for Core Lithium

Despite these upgrades, the analysts have not made any major changes to their price target of AU$0.48, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Core Lithium's rate of growth is expected to accelerate meaningfully, with the forecast 8x annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 105% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Core Lithium is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Core Lithium.

Analysts are definitely bullish on Core Lithium, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including concerns around earnings quality. You can learn more, and discover the 1 other flag we've identified, 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.