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Analyst Estimates for Gold Fields: Is Optimism Fading?

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GFI revenue estimates

Wall Street analysts covering Gold Fields (GFI) estimate revenues of $2.7 billion for 2017, which is flat YoY (year-over-year). Flat growth is expected to give way to steady growth as more production comes online. In 2018 and 2019, revenues are expected to rise 2.8% and 9.8%, respectively.

Growth projects such as Damang and Gruyere are expected to help the company grow its production and revenues in the medium to long term.

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GFI earnings estimates

Gold Fields’ costs have been higher than its peers, and its 2017 costs have been higher than 2016. That could be the reason its EBITDA (earnings before interest, tax, depreciation, and amortization) is expected to fall 7.6% YoY in 2017. Since its revenues are expected to remain flat and EBITDA is expected to decline, the projected margins for 2017 are lower at 41.7% compared to the actual margin of 44.8% in 2016. The margins for 2018 are expected to be even lower at 40.7%. In 2019, analysts expect the company’s margins to increase to 42.7%.

High margins for GFI

Among the South African precious metal miners, GFI has the highest margins. Its peers (GDXJ) AngloGold Ashanti (AU), Sibanye Gold (SBGL), and Harmony Gold (HMY) have one-year forward margins of 36.1%, 27.5%, and 24.6%, respectively.

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