Today is shaping up negative for Syrah Resources Limited (ASX:SYR) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After the downgrade, the consensus from Syrah Resources' four analysts is for revenues of US$41m in 2024, which would reflect a not inconsiderable 14% decline in sales compared to the last year of performance. Per-share losses are expected to explode, reaching US$0.10 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$52m and losses of US$0.09 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Syrah Resources

The consensus price target fell 8.3% to AU$0.66, implicitly signalling that lower earnings per share are a leading indicator for Syrah Resources' valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Syrah Resources' past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 14% by the end of 2024. This indicates a significant reduction from annual growth of 23% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 1.3% per year. It's pretty clear that Syrah Resources' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Syrah Resources. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Syrah Resources.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Syrah Resources going out to 2026, and you can see them free on our platform here.