What Does The Future Hold For Arch Resources, Inc. (NYSE:ARCH)? These Analysts Have Been Cutting Their Estimates

The latest analyst coverage could presage a bad day for Arch Resources, Inc. (NYSE:ARCH), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the consensus from five analysts covering Arch Resources is for revenues of US$2.6b in 2024, implying an uneasy 10% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to dive 21% to US$14.09 in the same period. Before this latest update, the analysts had been forecasting revenues of US$2.6b and earnings per share (EPS) of US$14.73 in 2024. So it looks like there's been a small decline in overall sentiment after the new consensus numbers - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Check out our latest analysis for Arch Resources

The consensus price target held steady at US$182, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 20% by the end of 2024. This indicates a significant reduction from annual growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.2% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Arch Resources is expected to lag 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. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data indicates that Arch Resources' revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Arch Resources after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Arch Resources analysts - going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.

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