Iamgold Corp (IAG, Financial) is expected to release results for the fourth quarter and final 2017 results on Wednesday. The expectation is that the company's performance will likely beat consensus, generating a huge positive surprise on earnings.
For the quarter, 10 estimates have been produced, which fall in a rnage of a 7-cent loss per share to 4-cent profit per share. The mean is one cent profit per share of Iamgold Corp.
Source: Yahoo Finance
The average net profit of one cent per share is flat on a year over year basis, and it is backed on a quarterly revenue that consensus forecasts show at $276.78 million. On average, the revenue is a 9.60% growth from the prior-year quarter:
Source: Yahoo Finance
Revenues range between a low of $252 million and a high of $304.74 million. If consensus steps in, Iamgold should have closed full fiscal 2017 with a revenue of $1.08 billion. This is a 9.30% growth from a year ago and a mean value of a $1.04 billion (low) to $1.11 billion (high) range. Four analysts have been surveyed to date on fourth quarter revenue and 11 on full fiscal 2017 revenue.
If estimates will remain unchanged, Iamgold will likely beat consensus, triggering a significant impact on the market value of the stock. This forecast is based on the price at which the bullion traded on the London market over the last quarter of 2017.
As you can see in the below chart of Yahoo Finance, Iamgold met consensus on one cent of net profit per share predicted for the second quarter of 2017 when gold averaged $1,257 per ounce on the London bullion market. With a bullion averaging the price of $1,274.28 per ounce on the last three months of 2017, Iamgold is closer to third quarter actual EPS of 7 cents (the gold price was $1,278 an ounce) than to the actual EPS of one cent of the second quarter.
Source: Yahoo Finance
This means that another 400% to 600% positive surprise on the heels of Wednesday's earnings results is not chasing a chimera. Get your peepers out to Iamgold Corp because a significant appreciation of the stock is in the air this week.
Iamgold is trading at $5.88 per share. The stock has a market capitalization of $2.87 billion, a 52-weeks range of $ 3.36 to $7.25 per share, a price-book (P/B) ratio of 1 time (versus an industry average of 2.01 times) and an EV-to-Ebitda ratio of 2.61 times (versus an industry median of 10.18 times).
For the 52-weeks through Feb. 16, Iamgold Corp climbed 30%.
Currently, the stock is trading above the 200, 100 and 50-SMA lines.
The Relative Strength Indicator, as illustrated in the chart powered by GuruFocus is 52.17 of a 25 to 75 range.
(Disclosure: I have no positions in any security mentioned in this article).
