Analysts Have Made A Financial Statement On HUTCHMED (China) Limited's (LON:HCM) Half-Year Report

It's been a good week for HUTCHMED (China) Limited (LON:HCM) shareholders, because the company has just released its latest half-yearly results, and the shares gained 2.8% to UK£2.92. Revenues came in 4.3% below expectations, at US$306m. Statutory earnings per share were relatively better off, with a per-share profit of US$0.12 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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 HUTCHMED (China)

Taking into account the latest results, the consensus forecast from HUTCHMED (China)'s 20 analysts is for revenues of US$688.7m in 2024. This reflects a meaningful 13% improvement in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching US$0.11 per share. Before this latest report, the consensus had been expecting revenues of US$684.5m and US$0.13 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a cut to losses per share in particular.

The average price target held steady at UK£4.61, seeming to indicate that business is performing in line with expectations. 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. There are some variant perceptions on HUTCHMED (China), with the most bullish analyst valuing it at UK£5.87 and the most bearish at UK£2.27 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 27% 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 6.0% per year. So it's pretty clear that HUTCHMED (China) is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at UK£4.61, with the latest estimates not enough to have an impact on their price targets.

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 HUTCHMED (China) going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for HUTCHMED (China) that you need to take into consideration.

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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.

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