Stock Analysis

Sibanye Stillwater Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

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It's shaping up to be a tough period for Sibanye Stillwater Limited (JSE:SSW), which a week ago released some disappointing full-year results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with R138b revenue coming in 5.1% lower than what the analystsexpected. Statutory earnings per share (EPS) of R6.50 missed the mark badly, arriving some 21% below what was expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Sibanye Stillwater

JSE:SSW Earnings and Revenue Growth April 27th 2023

Taking into account the latest results, Sibanye Stillwater's eight analysts currently expect revenues in 2023 to be R140.2b, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 25% to R8.09. Before this earnings report, the analysts had been forecasting revenues of R143.7b and earnings per share (EPS) of R9.23 in 2023. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a real cut to earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the R55.16 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Sibanye Stillwater at R80.00 per share, while the most bearish prices it at R29.62. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. It's pretty clear that there is an expectation that Sibanye Stillwater's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 1.4% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Sibanye Stillwater is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sibanye Stillwater. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at R55.16, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Sibanye Stillwater analysts - going out to 2025, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Sibanye Stillwater that you need to take into consideration.

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Find out whether Sibanye Stillwater is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.