How might earnings at Randgold Resources Limited change in the years to come?
It's always worth keeping an eye on the earnings forecasts for your favourite companies, especially if you use forward price-to-earnings (P/E) ratios to gauge when to buy and sell your shares.
You never know, if City brokers have been revising their projections of late, your investments may not be as cheap -- or expensive -- as you think!
Today I'm looking at the earnings per share (EPS) forecasts for Randgold Resources (LSE: RRS) (NASDAQ: GOLD.US), the FTSE 100 gold miner. All my figures are courtesy of S&P Capital IQ.
The consensus for 2012 is for earnings per share of 316p, which puts the 5,870p shares on a lofty forward P/E of 19.
The estimates also suggest earnings may rise to 424p per share for 2013 and then climb to 520p per share in 2014 before falling to 255p the year after.
The data from S&P Capital IQ also indicates Randgold Resource's revenues may climb from £862m in 2012 to £1.07bn in 2013. Revenues may then then rise further to £1.3b in 2014.
All told, the forecasts aren't great and profits depend greatly on the outlook for gold prices. That said, that P/E of 23 looks like the market is hoping that gold prices may continue to shine for the next couple of years, at least.
Whether these projections make Randgold Resources a buy, a hold or a sell is, of course, up to you. To put the company's multiple into perspective, the FTSE 100 at 6,066 trades on a P/E of around 11.9.
But even if you already have Randgold Resources in your portfolio, there are plenty of other great stocks out there to consider, too. Some of them are listed in our special in-depth Motley Fool report "Eight Top Dividend Plays Held By Britain's Super Investor".
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> David does not own any share mentioned in this article.