Chongqing Changan Automobile Company Limited Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

As you might know, Chongqing Changan Automobile Company Limited (SZSE:000625) just kicked off its latest second-quarter results with some very strong numbers. It was overall a positive result, with revenues beating expectations by 7.1% to hit CN¥40b. Chongqing Changan Automobile also reported a statutory profit of CN¥0.16, which was an impressive 631% above what the analysts had forecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Chongqing Changan Automobile

Taking into account the latest results, the most recent consensus for Chongqing Changan Automobile from 19 analysts is for revenues of CN¥180.7b in 2024. If met, it would imply a notable 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 24% to CN¥0.81. Before this earnings report, the analysts had been forecasting revenues of CN¥186.6b and earnings per share (EPS) of CN¥0.80 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

It will come as no surprise then, that the consensus price target fell 6.5% to CN¥17.76following these changes. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Chongqing Changan Automobile, with the most bullish analyst valuing it at CN¥24.00 and the most bearish at CN¥13.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. The analysts are definitely expecting Chongqing Changan Automobile's growth to accelerate, with the forecast 24% annualised growth to the end of 2024 ranking favourably alongside historical growth of 18% per annum 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 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Chongqing Changan Automobile is expected to grow much faster than its 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. They also downgraded Chongqing Changan Automobile's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Chongqing Changan Automobile's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Chongqing Changan Automobile 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 3 warning signs with Chongqing Changan Automobile , 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.