Zhejiang Huayou Cobalt Co., Ltd Just Recorded A 64% EPS Beat: Here's What Analysts Are Forecasting Next

Shareholders might have noticed that Zhejiang Huayou Cobalt Co., Ltd (SHSE:603799) filed its half-year result this time last week. The early response was not positive, with shares down 2.7% to CN¥21.67 in the past week. Revenues of CN¥30b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of CN¥1.00 an impressive 64% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Zhejiang Huayou Cobalt

Taking into account the latest results, the current consensus from Zhejiang Huayou Cobalt's nine analysts is for revenues of CN¥71.2b in 2024. This would reflect a notable 13% increase on its revenue over the past 12 months. Per-share earnings are expected to ascend 18% to CN¥2.05. In the lead-up to this report, the analysts had been modelling revenues of CN¥71.6b and earnings per share (EPS) of CN¥2.06 in 2024. 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.

The consensus price target fell 12% to CN¥27.41, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the semi-annual results. 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 Zhejiang Huayou Cobalt analyst has a price target of CN¥32.55 per share, while the most pessimistic values it at CN¥23.80. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 28% growth on an annualised basis. That is in line with its 31% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.6% per year. So it's pretty clear that Zhejiang Huayou Cobalt is forecast to grow substantially 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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 Zhejiang Huayou Cobalt going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for Zhejiang Huayou Cobalt (1 is concerning!) that you should be aware 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.