Investors in Centamin plc (LON:CEY) had a good week, as its shares rose 8.7% to close at UK£0.90 following the release of its half-yearly results. It was a credible result overall, with revenues of US$382m and statutory earnings per share of US$0.087 both in line with analyst estimates, showing that Centamin is executing in line with expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Centamin from ten analysts is for revenues of US$827.0m in 2022 which, if met, would be a solid 11% increase on its sales over the past 12 months. Per-share earnings are expected to expand 11% to US$0.12. Before this earnings report, the analysts had been forecasting revenues of US$829.7m and earnings per share (EPS) of US$0.10 in 2022. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the decent improvement in earnings per share expectations following these results.
There's been no major changes to the consensus price target of UK£1.26, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's 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. Currently, the most bullish analyst values Centamin at UK£1.57 per share, while the most bearish prices it at UK£1.03. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Centamin's rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 4.4% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 1.6% per year. So it's clear with the acceleration in growth, Centamin is expected to grow meaningfully faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Centamin following these results. On the plus side, they made no changes to their revenue estimates - and they expect sales to perform better than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Centamin going out to 2024, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Centamin (1 doesn't sit too well with us!) that you need to take into consideration.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Valuation is complex, but we're helping make it simple.
Find out whether Centamin is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis