Shanghai Hanbell Precise Machinery Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Shanghai Hanbell Precise Machinery Co., Ltd. (SZSE:002158) shareholders are probably feeling a little disappointed, since its shares fell 2.5% to CN¥16.45 in the week after its latest quarterly results. Revenues of CN¥1.1b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of CN¥0.57 an impressive 22% ahead of estimates. 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.

View our latest analysis for Shanghai Hanbell Precise Machinery

Taking into account the latest results, the current consensus from Shanghai Hanbell Precise Machinery's seven analysts is for revenues of CN¥4.11b in 2024. This would reflect a reasonable 5.0% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 6.9% to CN¥1.90. Before this earnings report, the analysts had been forecasting revenues of CN¥4.16b and earnings per share (EPS) of CN¥1.81 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target fell 7.7% to CN¥19.83, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. 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. Currently, the most bullish analyst values Shanghai Hanbell Precise Machinery at CN¥23.00 per share, while the most bearish prices it at CN¥17.40. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shanghai Hanbell Precise Machinery's past performance and to peers in the same industry. We would highlight that Shanghai Hanbell Precise Machinery's revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2024 being well below the historical 18% 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 16% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Shanghai Hanbell Precise Machinery.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Shanghai Hanbell Precise Machinery's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Shanghai Hanbell Precise Machinery's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Shanghai Hanbell Precise Machinery analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Shanghai Hanbell Precise Machinery that you need to be mindful 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.