CNOOC Limited (HKG:883) missed earnings with its latest yearly results, disappointing overly-optimistic forecasters. CNOOC missed analyst forecasts, with revenues of CN¥421b and statutory earnings per share (EPS) of CN¥2.90, falling short by 6.0% and 4.4% respectively. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following last week's earnings report, CNOOC's 15 analysts are forecasting 2025 revenues to be CN¥424.4b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be CN¥2.92, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of CN¥451.2b and earnings per share (EPS) of CN¥2.99 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
See our latest analysis for CNOOC
Despite the cuts to forecast earnings, there was no real change to the HK$22.23 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values CNOOC at HK$28.20 per share, while the most bearish prices it at HK$10.60. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that CNOOC's revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2025 being well below the historical 20% p.a. growth over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 0.6% per year. So it's clear that despite the slowdown in growth, CNOOC is still expected to grow meaningfully faster than the wider industry.
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. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider industry. The consensus price target held steady at HK$22.23, with the latest estimates not enough to have an impact on their price targets.
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 CNOOC going out to 2027, 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 CNOOC (at least 1 which doesn't sit too well with us) , 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.