Analysts Just Made A Major Revision To Their Pan American Silver Corp. (TSE:PAAS) Revenue Forecasts

The analysts covering Pan American Silver Corp. (TSE:PAAS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for next year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the five analysts covering Pan American Silver provided consensus estimates of US$1.4b revenue in 2023, which would reflect a small 6.1% decline on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$1.7b in 2023. It looks like forecasts have become a fair bit less optimistic on Pan American Silver, given the substantial drop in revenue estimates.

View our latest analysis for Pan American Silver

There was no particular change to the consensus price target of US$20.52, with Pan American Silver's latest outlook seemingly not enough to result in a change of valuation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.9% by the end of 2023. This indicates a significant reduction from annual growth of 17% 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 13% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Pan American Silver is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for next year. They're also anticipating slower revenue growth than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Pan American Silver going forwards.

Not only have the analysts been downgrading the stock, but it looks like Pan American Silver might find it hard to maintain its dividends, if these forecasts prove accurate. What makes us say that? Learn more by visiting our risks dashboard 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 that insiders are buying.

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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.