Some Anglo Pacific Group plc (LON:APF) Analysts Just Made A Major Cut To Next Year's Estimates

One thing we could say about the analysts on Anglo Pacific Group plc (LON:APF) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After this downgrade, Anglo Pacific Group's four analysts are now forecasting revenues of US$102m in 2022. This would be a solid 20% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to be US$0.17, approximately in line with the last 12 months. Prior to this update, the analysts had been forecasting revenues of US$114m and earnings per share (EPS) of US$0.25 in 2022. Indeed, we can see that the analysts are a lot more bearish about Anglo Pacific Group's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Anglo Pacific Group

Analysts made no major changes to their price target of UK£2.28, suggesting the downgrades are not expected to have a long-term impact on Anglo Pacific Group's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Anglo Pacific Group at UK£2.60 per share, while the most bearish prices it at UK£1.90. 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 Anglo Pacific Group shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Anglo Pacific Group's growth to accelerate, with the forecast 20% annualised growth to the end of 2022 ranking favourably alongside historical growth of 8.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 3.1% annually. It seems obvious that as part of the brighter growth outlook, Anglo Pacific Group is expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Anglo Pacific Group after the downgrade.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Anglo Pacific Group's business, like recent substantial insider selling. For more information, you can click here to discover this and the 2 other concerns we've identified.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.