Some Lundin Mining Corporation (TSE:LUN) Analysts Just Made A Major Cut To Next Year's Estimates

One thing we could say about the analysts on Lundin Mining Corporation (TSE:LUN) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the consensus from nine analysts covering Lundin Mining is for revenues of US$3.5b in 2025, implying a not inconsiderable 15% decline in sales compared to the last 12 months. Per-share earnings are expected to bounce 45% to US$0.46. Prior to this update, the analysts had been forecasting revenues of US$3.6b and earnings per share (EPS) of US$0.46 in 2025. So it looks like the analysts have become a bit less optimistic after the latest consensus updates announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

See our latest analysis for Lundin Mining

The average price target was steady at US$11.44 even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Lundin Mining analyst has a price target of US$16.68 per share, while the most pessimistic values it at US$8.97. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 12% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 15% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. It's pretty clear that Lundin Mining's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Lundin Mining's revenues are expected to grow slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Lundin Mining after the downgrade.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Lundin Mining analysts - going out to 2027, and you can see them 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 downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.