Last week, you might have seen that COSCO SHIPPING Ports Limited (HKG:1199) released its interim result to the market. The early response was not positive, with shares down 6.1% to HK$4.46 in the past week. Revenues came in 3.6% below expectations, at US$710m. Statutory earnings per share were relatively better off, with a per-share profit of US$0.093 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on COSCO SHIPPING Ports after the latest results.
Check out our latest analysis for COSCO SHIPPING Ports
Following last week's earnings report, COSCO SHIPPING Ports' five analysts are forecasting 2024 revenues to be US$1.53b, approximately in line with the last 12 months. Statutory earnings per share are predicted to increase 6.7% to US$0.091. In the lead-up to this report, the analysts had been modelling revenues of US$1.52b and earnings per share (EPS) of US$0.093 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at HK$6.02, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic COSCO SHIPPING Ports analyst has a price target of HK$6.69 per share, while the most pessimistic values it at HK$5.19. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that COSCO SHIPPING Ports' revenue growth is expected to slow, with the forecast 1.5% annualised growth rate until the end of 2024 being well below the historical 10% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.9% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than COSCO SHIPPING Ports.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that COSCO SHIPPING Ports' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for COSCO SHIPPING Ports going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with COSCO SHIPPING Ports , and understanding these should be part of your investment process.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.