Analyst Estimates: Here's What Brokers Think Of Lundin Gold Inc. (TSE:LUG) After Its First-Quarter Report

Shareholders of Lundin Gold Inc. (TSE:LUG) will be pleased this week, given that the stock price is up 10% to CA$20.29 following its latest quarterly results. Revenues came in 3.5% below expectations, at US$230m. Statutory earnings per share were relatively better off, with a per-share profit of US$0.77 being roughly in line with analyst estimates. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Lundin Gold

After the latest results, the eight analysts covering Lundin Gold are now predicting revenues of US$1.07b in 2024. If met, this would reflect a huge 23% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 61% to US$1.15. Before this earnings report, the analysts had been forecasting revenues of US$1.04b and earnings per share (EPS) of US$0.88 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a great increase in earnings per share in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of CA$23.27, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Lundin Gold, with the most bullish analyst valuing it at CA$28.00 and the most bearish at CA$20.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Lundin Gold's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 31% growth on an annualised basis. This is compared to a historical growth rate of 44% 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) 12% per year. Even after the forecast slowdown in growth, it seems obvious that Lundin Gold is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Lundin Gold's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at CA$23.27, 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 Lundin Gold going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Lundin Gold you should know about.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.