China Aircraft Leasing Group Holdings Limited Recorded A 52% Miss On Revenue: Analysts Are Revisiting Their Models

It's shaping up to be a tough period for China Aircraft Leasing Group Holdings Limited (HKG:1848), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. China Aircraft Leasing Group Holdings delivered a grave earnings miss, with both revenues (HK$1.7b) and statutory earnings per share (HK$0.48) falling badly short of analyst expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for China Aircraft Leasing Group Holdings

Taking into account the latest results, the consensus forecast from China Aircraft Leasing Group Holdings' three analysts is for revenues of HK$3.60b in 2021, which would reflect a substantial 111% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to drop 11% to HK$1.21 in the same period. Before this earnings report, the analysts had been forecasting revenues of HK$4.00b and earnings per share (EPS) of HK$1.34 in 2021. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The consensus price target fell 5.8% to HK$8.13, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values China Aircraft Leasing Group Holdings at HK$9.80 per share, while the most bearish prices it at HK$7.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 analysts are definitely expecting China Aircraft Leasing Group Holdings' growth to accelerate, with the forecast 111% annualised growth to the end of 2021 ranking favourably alongside historical growth of 1.3% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect China Aircraft Leasing Group Holdings to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although industry data suggests that China Aircraft Leasing Group Holdings' revenues are 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for China Aircraft Leasing Group Holdings going out to 2023, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 5 warning signs for China Aircraft Leasing Group Holdings you should be aware of, and 1 of them can't be ignored.

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This article by Simply Wall St is general in nature. 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.
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