These Analysts Think Orezone Gold Corporation’s (TSE:ORE) Sales Are Under Threat
One thing we could say about the analysts on Orezone Gold Corporation (TSE:ORE) – they aren’t optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the consensus from three analysts covering Orezone Gold is for revenues of US$232m in 2024, implying an uncomfortable 14% decline in sales compared to the last 12 months. Per-share earnings are expected to surge 78% to US$0.21. Before this latest update, the analysts had been forecasting revenues of US$263m and earnings per share (EPS) of US$0.21 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a small dip in EPS estimates to boot.
View our latest analysis for Orezone Gold
Analysts made no major changes to their price target of CA$1.78, suggesting the downgrades are not expected to have a long-term impact on Orezone Gold’s valuation.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 14% by the end of 2024. This indicates a significant reduction from annual growth of 94% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 11% annually for the foreseeable future. It’s pretty clear that Orezone Gold’s revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Orezone Gold. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn’t be surprised if the market became a lot more cautious on Orezone Gold after today.
Unfortunately, the earnings downgrade – if accurate – may also place pressure on Orezone Gold’s mountain of debt, which could lead to some belt tightening for shareholders. To see more of our financial analysis, you can click through to our free platform to learn more about its balance sheet and specific concerns we’ve identified.
You can also see our analysis of Orezone Gold’s Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.
