Wangfujing Group Co., Ltd. Just Missed EPS By 14%: Here's What Analysts Think Will Happen Next

As you might know, Wangfujing Group Co., Ltd. (SHSE:600859) recently reported its annual numbers. It was not a great result overall. Although revenues beat expectations, hitting CN¥12b, statutory earnings missed analyst forecasts by 14%, coming in at just CN¥0.62 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 Wangfujing Group

Taking into account the latest results, the current consensus from Wangfujing Group's eight analysts is for revenues of CN¥13.1b in 2024. This would reflect a satisfactory 7.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 24% to CN¥0.77. Before this earnings report, the analysts had been forecasting revenues of CN¥13.9b and earnings per share (EPS) of CN¥0.99 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The consensus price target fell 19% to CN¥17.40, with the weaker earnings outlook clearly leading valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Wangfujing Group at CN¥19.00 per share, while the most bearish prices it at CN¥15.80. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company 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 Wangfujing Group's past performance and to peers in the same industry. For example, we noticed that Wangfujing Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 7.3% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 21% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 13% annually for the foreseeable future. So although Wangfujing Group's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Wangfujing Group. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Wangfujing Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Wangfujing Group 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 Wangfujing Group that you need to be mindful of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.