AECC Aviation Power Co.,Ltd Recorded A 7.2% Miss On Revenue: Analysts Are Revisiting Their Models

As you might know, AECC Aviation Power Co.,Ltd (SHSE:600893) recently reported its quarterly numbers. Revenues came in 7.2% below expectations, at CN¥12b. Statutory earnings per share were relatively better off, with a per-share profit of CN¥0.53 being roughly in line with analyst estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for AECC Aviation PowerLtd

Taking into account the latest results, the current consensus from AECC Aviation PowerLtd's seven analysts is for revenues of CN¥48.2b in 2024. This would reflect a notable 8.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 18% to CN¥0.57. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥50.5b and earnings per share (EPS) of CN¥0.61 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

It'll come as no surprise then, to learn that the analysts have cut their price target 8.7% to CN¥42.65. 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. There are some variant perceptions on AECC Aviation PowerLtd, with the most bullish analyst valuing it at CN¥45.00 and the most bearish at CN¥40.30 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. It's clear from the latest estimates that AECC Aviation PowerLtd's rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 14% 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 21% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, AECC Aviation PowerLtd is expected to grow slower 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 AECC Aviation PowerLtd 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 1 warning sign with AECC Aviation PowerLtd , and understanding this 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.