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What You Need To Know About The Pan American Silver Corp. (TSE:PAAS) Analyst Downgrade Today

One thing we could say about the analysts on Pan American Silver Corp. (TSE:PAAS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the five analysts covering Pan American Silver provided consensus estimates of US$1.4b revenue in 2023, which would reflect a discernible 6.1% decline on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of US$1.7b in 2023. The consensus view seems to have become more pessimistic on Pan American Silver, noting the substantial drop in revenue estimates in this update.

View our latest analysis for Pan American Silver


There was no particular change to the consensus price target of US$20.52, with Pan American Silver's latest outlook seemingly not enough to result in a change of valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 4.9% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 17% 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 13% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Pan American Silver is expected to lag the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Pan American Silver next year. They're also anticipating slower revenue growth than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Pan American Silver going forwards.

After a downgrade like this one, it's pretty clear that previous forecasts were too optimistic. Worse, it's possible that the forecast future income could struggle to cover Pan American Silver'sdividend payments. For more information, you can click here to learn more about our dividend analysis and the 1 potential warning sign we've identified.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.

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