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One thing we could say about the analysts on Pilbara Minerals Limited (ASX:PLS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the downgrade, the consensus from 15 analysts covering Pilbara Minerals is for revenues of AU$2.1b in 2024, implying a substantial 48% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to plummet 58% to AU$0.33 in the same period. Before this latest update, the analysts had been forecasting revenues of AU$2.4b and earnings per share (EPS) of AU$0.38 in 2024. Indeed, we can see that the analysts are a lot more bearish about Pilbara Minerals' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for Pilbara Minerals
Despite the cuts to forecast earnings, there was no real change to the AU$4.66 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 48% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 82% 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 2.3% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Pilbara Minerals is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales 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 Pilbara Minerals.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Pilbara Minerals going out to 2026, and you can see them free on our platform here.