Shareholders might have noticed that Li Ning Company Limited (HKG:2331) filed its yearly result this time last week. The early response was not positive, with shares down 2.1% to HK$14.70 in the past week. Li Ning beat revenue expectations by 2.0%, at CN¥29b. Statutory earnings per share (EPS) came in at CN¥1.17, some 2.2% short of analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
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Following last week's earnings report, Li Ning's 33 analysts are forecasting 2025 revenues to be CN¥29.0b, approximately in line with the last 12 months. Statutory earnings per share are expected to drop 11% to CN¥1.05 in the same period. Before this earnings report, the analysts had been forecasting revenues of CN¥29.0b and earnings per share (EPS) of CN¥1.06 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.
See our latest analysis for Li Ning
There were no changes to revenue or earnings estimates or the price target of HK$18.93, suggesting that the company has met expectations in its recent result. 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. The most optimistic Li Ning analyst has a price target of HK$49.83 per share, while the most pessimistic values it at HK$13.03. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Li Ning's past performance and to peers in the same industry. We would highlight that Li Ning's revenue growth is expected to slow, with the forecast 1.1% annualised growth rate until the end of 2025 being well below the historical 16% 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 13% per year. Factoring in the forecast slowdown in growth, it seems obvious that Li Ning is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Li Ning going out to 2027, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Li Ning that we have uncovered.
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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.