Forecast: Analysts Think Alpha Metallurgical Resources, Inc.'s (NYSE:AMR) Business Prospects Have Improved Drastically

Shareholders in Alpha Metallurgical Resources, Inc. (NYSE:AMR) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following the upgrade, the consensus from two analysts covering Alpha Metallurgical Resources is for revenues of US$3.3b in 2024, implying a measurable 4.9% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to dive 30% to US$38.92 in the same period. Before this latest update, the analysts had been forecasting revenues of US$3.0b and earnings per share (EPS) of US$31.60 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for Alpha Metallurgical Resources

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$406, suggesting that the forecast performance does not have a long term impact on the company's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Alpha Metallurgical Resources' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 4.9% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 18% 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 4.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Alpha Metallurgical Resources is expected to lag the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Alpha Metallurgical Resources could be a good candidate for more research.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 3 potential flags with Alpha Metallurgical Resources, including its declining profit margins. For more information, you can click through to our platform to learn more about this and the 2 other flags 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.