Bearish: Analysts Just Cut Their MP Materials Corp. (NYSE:MP) Revenue and EPS estimates

Today is shaping up negative for MP Materials Corp. (NYSE:MP) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the consensus from eleven analysts covering MP Materials is for revenues of US$168m in 2024, implying a perceptible 3.2% decline in sales compared to the last 12 months. Per-share losses are expected to explode, reaching US$0.40 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of US$190m and losses of US$0.26 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for MP Materials

There was no major change to the consensus price target of US$21.88, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would also point out that the forecast 6.2% annualised revenue decline to the end of 2024 is better than the historical trend, which saw revenues shrink 10% annually over the past three years By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.2% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect MP Materials to suffer worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at MP Materials. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that MP Materials' revenues are expected to grow slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of MP Materials.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for MP Materials going out to 2026, and you can see them free on our platform here.

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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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