It's been a good week for AngloGold Ashanti Limited (JSE:ANG) shareholders, because the company has just released its latest annual results, and the shares gained 7.9% to R357. AngloGold Ashanti beat revenue expectations by 2.1%, recording sales of US$4.0b. Statutory earnings per share (EPS) came in at US$1.48, some 4.2% short of analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from AngloGold Ashanti's six analysts is for revenues of US$4.55b in 2022, which would reflect a solid 13% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to dive 24% to US$1.13 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$4.51b and earnings per share (EPS) of US$2.69 in 2022. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.
The consensus price target held steady at R328, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values AngloGold Ashanti at R380 per share, while the most bearish prices it at R228. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the AngloGold Ashanti's past performance and to peers in the same industry. The analysts are definitely expecting AngloGold Ashanti's growth to accelerate, with the forecast 13% annualised growth to the end of 2022 ranking favourably alongside historical growth of 0.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 4.1% annually. It seems obvious that as part of the brighter growth outlook, AngloGold Ashanti is expected to grow faster 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. Fortunately, they also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations. Their estimates also suggest that AngloGold Ashanti's revenues are expected to perform better than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 AngloGold Ashanti analysts - going out to 2024, and you can see them free on our platform here.
You can also see whether AngloGold Ashanti is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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.