S.F. Holding Co., Ltd. Just Missed EPS By 32%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for S.F. Holding Co., Ltd. (SZSE:002352), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with CN¥65b revenue coming in 3.8% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.39 missed the mark badly, arriving some 32% below what was expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for S.F. Holding

After the latest results, the 19 analysts covering S.F. Holding are now predicting revenues of CN¥287.3b in 2024. If met, this would reflect a decent 9.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 8.6% to CN¥1.90. Before this earnings report, the analysts had been forecasting revenues of CN¥288.7b and earnings per share (EPS) of CN¥2.02 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥47.19, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 S.F. Holding analyst has a price target of CN¥63.00 per share, while the most pessimistic values it at CN¥35.30. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that S.F. Holding's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% annually. So it's pretty clear that, while S.F. Holding's revenue growth is expected to slow, it's expected to grow roughly in line with 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 S.F. Holding. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple S.F. Holding analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that S.F. Holding is showing 1 warning sign in our investment analysis , you should know about...

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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.