The latest analyst coverage could presage a bad day for Huadian Power International Corporation Limited (HKG:1071), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
Following the latest downgrade, the five analysts covering Huadian Power International provided consensus estimates of CN¥102b revenue in 2025, which would reflect a not inconsiderable 9.4% decline on its sales over the past 12 months. Per-share earnings are expected to rise 7.5% to CN¥0.60. Previously, the analysts had been modelling revenues of CN¥116b and earnings per share (EPS) of CN¥0.61 in 2025. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.
View our latest analysis for Huadian Power International
Analysts made no major changes to their price target of CN¥4.71, suggesting the downgrades are not expected to have a long-term impact on Huadian Power International's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Huadian Power International analyst has a price target of CN¥5.13 per share, while the most pessimistic values it at CN¥4.31. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Huadian Power International is an easy business to forecast or the underlying assumptions are obvious.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 9.4% by the end of 2025. This indicates a significant reduction from annual growth of 4.9% 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 4.1% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Huadian Power International is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Huadian Power International's revenues are expected to grow slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Huadian Power International after today.
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 Huadian Power International going out to 2026, and you can see them free on our platform here.
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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.