Is EQX's Q1 2025 earnings forecast optimistic?

Equinox Gold's (EQX) Q1 2025 earnings forecast appears to be cautiously optimistic, considering both the company's production outlook and the analyst sentiment. 1. **Production Outlook**: EQX targets a significant increase in gold production for 2025, aiming for between 635,000 and 750,000 ounces. This is a substantial upgrade from the 622,000 ounces produced in 2024. The ramp-up at the Greenstone Mine, which contributed significantly to last year's production, is expected to continue. Additionally, the company's consolidated ownership of the Greenstone Mine and successful exploration drilling suggest a positive outlook for reserves and mine life. 2. **Financial Projections**: The estimated EPS for Q1 2025 is $0.11, which, although modest, is a reflection of the company's focus on cost management. The estimated revenue for the quarter is $2.39 billion, which, if met, would represent a significant year-over-year increase. Analysts had previously forecasted revenues of $2.4 billion for 2025, which would have been a 70% growth from the previous year. The revised forecast of $2.2 billion for 2025 by analysts still indicates a substantial annual increase, albeit from a higher initial estimate. 3. **Analyst Sentiment**: Despite the revision in analyst forecasts, the consensus price target remains at $7.60, suggesting that analysts do not see any immediate need for a valuation adjustment. The range of underlying estimates is wide, from $6.33 to $9.14 per share, indicating that while there is some diversity in opinions, the stock does not appear to be a clear "success or failure" situation in the eyes of analysts. 4. **Industry Trends**: The broader gold mining industry is expected to benefit from rising gold prices, which gained 26% in 2024 and are projected to continue increasing in 2025 due to geopolitical tensions and central bank buying. This trend is likely to support EQX's earnings growth as gold prices are a key driver for the company's revenue. In conclusion, while the Q1 2025 earnings forecast may not be overly aggressive given the company's production targets and analyst expectations, it is certainly aligned with a positive industry outlook and the company's growth potential.