Tianqi Lithium Corporation Just Missed Earnings - But Analysts Have Updated Their Models

Shareholders might have noticed that Tianqi Lithium Corporation (SZSE:002466) filed its full-year result this time last week. The early response was not positive, with shares down 3.7% to CN¥47.97 in the past week. Revenues were in line with forecasts, at CN¥41b, although statutory earnings per share came in 19% below what the analysts expected, at CN¥4.45 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Tianqi Lithium after the latest results.

View our latest analysis for Tianqi Lithium

Taking into account the latest results, the current consensus, from the 17 analysts covering Tianqi Lithium, is for revenues of CN¥29.7b in 2024. This implies a painful 27% reduction in Tianqi Lithium's revenue over the past 12 months. Statutory earnings per share are forecast to dip 4.5% to CN¥4.25 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CN¥22.9b and earnings per share (EPS) of CN¥5.10 in 2024. Although revenues are expected to increase meaningfully, the analysts have acknowledged the cost of growth, given the substantial drop in EPS estimates following the latest report.

The consensus price target was unchanged at CN¥55.06, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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 Tianqi Lithium, with the most bullish analyst valuing it at CN¥80.00 and the most bearish at CN¥33.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 27% annualised decline to the end of 2024. That is a notable change from historical growth of 57% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. It's pretty clear that Tianqi Lithium's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Tianqi Lithium. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Tianqi Lithium 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 2 warning signs for Tianqi Lithium 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.