Investors in Weichai Power Co., Ltd. (HKG:2338) had a good week, as its shares rose 2.9% to close at HK$16.76 following the release of its full-year results. It was an okay result overall, with revenues coming in at CN¥216b, roughly what the analysts had been expecting. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Weichai Power after the latest results.
Taking into account the latest results, the most recent consensus for Weichai Power from 23 analysts is for revenues of CN¥229.9b in 2025. If met, it would imply a credible 6.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 12% to CN¥1.48. In the lead-up to this report, the analysts had been modelling revenues of CN¥234.6b and earnings per share (EPS) of CN¥1.49 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
View our latest analysis for Weichai Power
The analysts reconfirmed their price target of HK$18.25, showing that the business is executing well and in line with expectations. 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. Currently, the most bullish analyst values Weichai Power at HK$21.18 per share, while the most bearish prices it at HK$12.60. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Weichai Power's past performance and to peers in the same industry. It's clear from the latest estimates that Weichai Power's rate of growth is expected to accelerate meaningfully, with the forecast 6.6% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 2.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Weichai Power is expected to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.
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 Weichai Power going out to 2027, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Weichai Power that you should be aware of.
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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.