Arch Resources, Inc. (NYSE: ARCH) just released its quarterly report and things are looking upbeat. Overall, results were pretty good, with revenue exceeding expectations of $ 358 million and statutory losses of just $ 0.40 per share, 29% lower than analysts had expected. Following the result, analysts updated their earnings model, and it would be good to know if they think there has been a significant change in the outlook for the company, or if it is like habit. With that in mind, we’ve rounded up the latest statutory forecast to see what analysts expect for next year.
See our latest review for Arch Resources
Based on the latest results, the consensus of the three Arch Resources analysts is forecasting revenue of US $ 1.54 billion in 2021, which would reflect a decent 11% improvement in sales from the past 12 months. Profits expected to improve, Arch Resources expects to report statutory profit of $ 4.19 per share. Before this report was written, analysts had modeled revenues of US $ 1.49 billion and earnings per share (EPS) of US $ 4.29 in 2021. So it’s pretty clear that the consensus is mixed on Arch Resources after the latest results; while analysts raised the earnings figures, they also administered a small drop in earnings per share expectations.
There has been no major change to the target price of US $ 58.60, which suggests that the impact of forecast higher sales and lower profits will not result in a significant change in the price. business valuation. There is another way to think about price targets, however, and that is to look at the range of price targets offered by analysts, as a wide range of estimates might suggest a different view of the possible outcomes for the market. business. There are a few variations of perceptions on Arch Resources, with the most bullish analyst valuing it at US $ 75.00 and the most bearish at US $ 50.00 per share. Analysts certainly have differing opinions on the company, but the dispersion of the estimates is not wide enough in our opinion to suggest that extreme results could await Arch Resources shareholders.
Looking at the big picture now, one way to understand these predictions is to compare them to estimates of past performance and industry growth. For example, we noticed that Arch Resources’ growth rate is expected to accelerate significantly, with revenues expected to grow 15% by the end of 2021 on an annualized basis. This is well above its historic decline of 4.3% per year over the past five years. Compare that to analysts’ estimates for the industry as a whole, which suggest the industry’s (total) revenue is expected to grow 8.5% per year. Not only is Arch Resources’ revenue expected to improve, but it looks like analysts are also expecting faster growth than the industry at large.
The bottom line
The biggest concern is that analysts have lowered their earnings per share estimates, suggesting headwinds could be brewing for Arch Resources. Pleasantly, they’ve also improved their revenue estimates, and their forecast suggests the company is expected to grow faster than the industry as a whole. The consensus price target held steady at US $ 58.60, with the latest estimates not being sufficient to impact their price targets.
That said, the company’s long-term profit trajectory is much bigger than next year. We have estimates – from several Arch Resources analysts – up to 2023, and you can see them for free on our platform here.
You can also see if Arch Resources is in too much debt and if its balance sheet is healthy, for free on our platform here.
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