The Kenmare Resources plc (LON:KMR) Yearly Results Are Out And Analysts Have Published New Forecasts

Investors in Kenmare Resources plc (LON:KMR) had a good week, as its shares rose 7.5% to close at UK£3.22 following the release of its annual results. Kenmare Resources reported in line with analyst predictions, delivering revenues of US$458m and statutory earnings per share of US$1.37, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Kenmare Resources

Taking into account the latest results, the current consensus, from the three analysts covering Kenmare Resources, is for revenues of US$425.4m in 2024. This implies a measurable 7.2% reduction in Kenmare Resources' revenue over the past 12 months. Statutory earnings per share are forecast to tumble 51% to US$0.72 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$431.1m and earnings per share (EPS) of US$0.80 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

The consensus price target held steady at UK£5.87, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Kenmare Resources, with the most bullish analyst valuing it at UK£8.46 and the most bearish at UK£4.28 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 would highlight that revenue is expected to reverse, with a forecast 7.2% annualised decline to the end of 2024. That is a notable change from historical growth of 19% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.0% annually for the foreseeable future. It's pretty clear that Kenmare Resources' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at UK£5.87, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Kenmare Resources analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Kenmare Resources (1 can't be ignored!) that you need to take into consideration.

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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.