These Analysts Think Bushveld Minerals Limited's (LON:BMN) Sales Are Under Threat

Today is shaping up negative for Bushveld Minerals Limited (LON:BMN) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Shares are up 5.1% to UK£0.18 in the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

After the downgrade, the dual analysts covering Bushveld Minerals are now predicting revenues of US$93m in 2020. If met, this would reflect a solid 14% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$114m of revenue in 2020. The consensus view seems to have become more pessimistic on Bushveld Minerals, noting the measurable cut to revenue estimates in this update.

View our latest analysis for Bushveld Minerals

There was no particular change to the consensus price target of UK£0.29, with Bushveld Minerals' latest outlook seemingly not enough to result in a change of valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Bushveld Minerals, with the most bullish analyst valuing it at UK£0.31 and the most bearish at UK£0.27 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Bushveld Minerals' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 29% growth to the end of 2020 on an annualised basis. That is well above its historical decline of 56% a year over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 2.7% annually. So it looks like Bushveld Minerals is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. The analysts also expect revenues to grow faster than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Bushveld Minerals after today.

That said, the analysts might have good reason to be negative on Bushveld Minerals, given recent substantial insider selling. For more information, you can click here to discover this and the 3 other flags we've identified.

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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