Neway Valve (Suzhou) Co., Ltd. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Neway Valve (Suzhou) Co., Ltd. (SHSE:603699) defied analyst predictions to release its annual results, which were ahead of market expectations. Neway Valve (Suzhou) beat earnings, with revenues hitting CN¥5.5b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 19%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Neway Valve (Suzhou)

Taking into account the latest results, the current consensus from Neway Valve (Suzhou)'s twin analysts is for revenues of CN¥6.62b in 2024. This would reflect a solid 19% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to swell 16% to CN¥1.10. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥6.58b and earnings per share (EPS) of CN¥1.05 in 2024. So the consensus seems to have become somewhat more optimistic on Neway Valve (Suzhou)'s earnings potential following these results.

The consensus price target rose 16% to CN¥20.41, suggesting that higher earnings estimates flow through to the stock's valuation as well.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Neway Valve (Suzhou)'s past performance and to peers in the same industry. It's clear from the latest estimates that Neway Valve (Suzhou)'s rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Neway Valve (Suzhou) is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Neway Valve (Suzhou)'s earnings potential next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

It is also worth noting that we have found 1 warning sign for Neway Valve (Suzhou) that you need to take into consideration.

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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.