Here's What Analysts Are Forecasting For Stanmore Resources Limited (ASX:SMR) After Its Half-Year Results

Last week, you might have seen that Stanmore Resources Limited (ASX:SMR) released its half-yearly result to the market. The early response was not positive, with shares down 3.5% to AU$3.07 in the past week. It was a credible result overall, with revenues of US$1.3b and statutory earnings per share of US$0.54 both in line with analyst estimates, showing that Stanmore Resources is executing in line with expectations. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Stanmore Resources

Taking into account the latest results, the four analysts covering Stanmore Resources provided consensus estimates of US$2.42b revenue in 2024, which would reflect a small 4.8% decline over the past 12 months. Statutory earnings per share are predicted to accumulate 2.7% to US$0.31. Before this earnings report, the analysts had been forecasting revenues of US$2.47b and earnings per share (EPS) of US$0.28 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The consensus has made no major changes to the price target of AU$3.95, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. 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. The most optimistic Stanmore Resources analyst has a price target of AU$4.80 per share, while the most pessimistic values it at AU$3.35. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 9.3% by the end of 2024. This indicates a significant reduction from annual growth of 49% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Stanmore Resources is expected to lag the wider industry.

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 Stanmore Resources following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at AU$3.95, 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. At Simply Wall St, we have a full range of analyst estimates for Stanmore Resources going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Stanmore Resources (1 shouldn't be ignored) 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.