What Does The Future Hold For Bushveld Minerals Limited (LON:BMN)? These Analysts Have Been Cutting Their Estimates

One thing we could say about the analysts on Bushveld Minerals Limited (LON:BMN) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After this downgrade, Bushveld Minerals' two analysts are now forecasting revenues of US$107m in 2021. This would be a solid 14% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$119m of revenue in 2021. It looks like forecasts have become a fair bit less optimistic on Bushveld Minerals, given the measurable cut to revenue estimates.

See our latest analysis for Bushveld Minerals

The consensus price target fell 13% to UK£0.26, with the analysts clearly less optimistic about Bushveld Minerals' valuation following this update. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Bushveld Minerals analyst has a price target of UK£0.33 per share, while the most pessimistic values it at UK£0.19. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Bushveld Minerals shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Bushveld Minerals' revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 35% over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 4.5% per year. So it's clear that despite the slowdown in growth, Bushveld Minerals is still expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. Analysts also expect revenues to perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Bushveld Minerals going forwards.

Of course, there's always more to the story. We have estimates for Bushveld Minerals from its two analysts out until 2023, 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 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.