Osisko Gold Royalties Ltd Yearly Results: Here's What Analysts Are Forecasting For Next Year

The yearly results for Osisko Gold Royalties Ltd (TSE:OR) were released last week, making it a good time to revisit its performance. Revenues were CA$393m, with Osisko Gold Royalties reporting some -8.4% below analyst expectations. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see analysts' latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Osisko Gold Royalties

After the latest results, the consensus from Osisko Gold Royalties's six analysts is for revenues of CA$185.6m in 2020, which would reflect a painful 53% decline in sales compared to the last year of performance. Earnings are expected to improve, with Osisko Gold Royalties forecast to report a statutory profit of CA$0.29 per share. Before this earnings report, analysts had been forecasting revenues of CA$162.7m and earnings per share (EPS) of CA$0.37 in 2020. Although revenues are expected to increase, analysts have become more pessimistic on earnings, given thelarge cut to EPS estimates following the latest report.

There's been no major changes to an analyst price target of CA$16.59, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. 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 Osisko Gold Royalties, with the most bullish analyst valuing it at CA$21.00 and the most bearish at CA$14.00 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.

Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 53% a significant reduction from annual growth of 54% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 6.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Osisko Gold Royalties to grow slower than the wider market.

The Bottom Line

The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, analysts also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider market. The consensus price target held steady at CA$16.59, with the latest estimates not enough to have an impact on analysts' estimated valuations.

Still, 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 Osisko Gold Royalties going out to 2022, and you can see them free on our platform here..

You can also see whether Osisko Gold Royalties is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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