Stanmore Resources Limited (ASX:SMR) shareholders are probably feeling a little disappointed, since its shares fell 8.0% to AU$2.97 in the week after its latest half-yearly results. It was a credible result overall, with revenues of US$1.3b and statutory earnings per share of US$0.54 both in line with analyst estimates, showing that Stanmore Resources is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Stanmore Resources  earnings-and-revenue-growth

Taking into account the latest results, the four analysts covering Stanmore Resources provided consensus estimates of US$2.41b revenue in 2024, which would reflect a small 4.9% decline over the past 12 months. Statutory earnings per share are predicted to increase 2.5% to US$0.31. In the lead-up to this report, the analysts had been modelling revenues of US$2.47b and earnings per share (EPS) of US$0.28 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

There's been no real change to the average price target of AU$3.95, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Stanmore Resources analyst has a price target of AU$4.80 per share, while the most pessimistic values it at AU$3.35. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 9.6% annualised decline to the end of 2024. That is a notable change from historical growth of 49% 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 1.7% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Stanmore Resources is expected to lag the wider industry.



The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Stanmore Resources following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at AU$3.95, with the latest estimates not enough to have an impact on their price targets.

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 Stanmore Resources analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted  3 warning signs for Stanmore Resources you should be aware of, and 1 of them is a bit concerning.

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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.