Analysts Are More Bearish On Sylvania Platinum Limited (LON:SLP) Than They Used To Be

Today is shaping up negative for Sylvania Platinum Limited (LON:SLP) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. 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 latest consensus from Sylvania Platinum's dual analysts is for revenues of US$100m in 2024, which would reflect a decent 10% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 66% to US$0.10. Prior to this update, the analysts had been forecasting revenues of US$112m and earnings per share (EPS) of US$0.12 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a real cut to earnings per share numbers as well.

View our latest analysis for Sylvania Platinum

Analysts made no major changes to their price target of AU$1.85, suggesting the downgrades are not expected to have a long-term impact on Sylvania Platinum's 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. We can infer from the latest estimates that forecasts expect a continuation of Sylvania Platinum'shistorical trends, as the 10% annualised revenue growth to the end of 2024 is roughly in line with the 10% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 1.0% annually. So it's pretty clear that Sylvania Platinum is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Sylvania Platinum. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Sylvania Platinum.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Sylvania Platinum's financials, such as the risk of cutting its dividend. For more information, you can click here to discover this and the 1 other warning sign we've identified.

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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.