Results: B2Gold Corp. Exceeded Expectations And The Consensus Has Updated Its Estimates

Simply Wall St
November 07, 2020

It's been a good week for B2Gold Corp. (TSE:BTO) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.5% to CA$9.04. It looks like a credible result overall - although revenues of US$487m were what the analysts expected, B2Gold surprised by delivering a (statutory) profit of US$0.25 per share, an impressive 71% above what was forecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for B2Gold

TSX:BTO Earnings and Revenue Growth November 7th 2020

After the latest results, the eleven analysts covering B2Gold are now predicting revenues of US$1.89b in 2021. If met, this would reflect a meaningful 16% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to reduce 5.0% to US$0.58 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.88b and earnings per share (EPS) of US$0.57 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$9.30, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic B2Gold analyst has a price target of US$13.41 per share, while the most pessimistic values it at US$9.93. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await B2Gold shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that B2Gold's revenue growth is expected to slow, with forecast 16% increase next year well below the historical 21%p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.3% next year. Even after the forecast slowdown in growth, it seems obvious that B2Gold is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$9.30, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for B2Gold going out to 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 4 warning signs for B2Gold you should be aware of, and 1 of them doesn't sit too well with us.

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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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