Compañía de Minas Buenaventura S.A.A.'s (NYSE:BVN) Has Found A Path To Profitability

By
Simply Wall St
Published
April 02, 2021
NYSE:BVN

Compañía de Minas Buenaventura S.A.A. (NYSE:BVN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Compañía de Minas Buenaventura S.A.A., a precious metals company, engages in the exploration, mining, concentration, smelting, and marketing of polymetallic ores and metals in Peru, the United States, Europe, and Asia. On 31 December 2020, the US$2.5b market-cap company posted a loss of US$141m for its most recent financial year. The most pressing concern for investors is Compañía de Minas BuenaventuraA's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Compañía de Minas BuenaventuraA

Compañía de Minas BuenaventuraA is bordering on breakeven, according to the 6 American Metals and Mining analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$198m in 2021. The company is therefore projected to breakeven around 12 months from now or less. We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 58% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NYSE:BVN Earnings Per Share Growth April 2nd 2021

Underlying developments driving Compañía de Minas BuenaventuraA's growth isn’t the focus of this broad overview, though, take into account that generally a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital judiciously, with debt making up 17% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Compañía de Minas BuenaventuraA, so if you are interested in understanding the company at a deeper level, take a look at Compañía de Minas BuenaventuraA's company page on Simply Wall St. We've also put together a list of relevant factors you should further examine:

  1. Valuation: What is Compañía de Minas BuenaventuraA worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Compañía de Minas BuenaventuraA is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Compañía de Minas BuenaventuraA’s board and the CEO’s background.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. 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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