One Channel Micron Holdings Company Limited (HKG:2115) Analyst Has Been Cutting Their Forecasts

One thing we could say about the covering analyst on Channel Micron Holdings Company Limited (HKG:2115) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the solo analyst covering Channel Micron Holdings provided consensus estimates of CN¥338m revenue in 2023, which would reflect a noticeable 4.1% decline on its sales over the past 12 months. Statutory earnings per share are supposed to shrink 2.8% to CN¥0.046 in the same period. Previously, the analyst had been modelling revenues of CN¥407m and earnings per share (EPS) of CN¥0.051 in 2023. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a minor downgrade to EPS estimates to boot.

View our latest analysis for Channel Micron Holdings

The average price target climbed 6.3% to CN¥0.52 despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would also point out that the forecast 4.1% annualised revenue decline to the end of 2023 is better than the historical trend, which saw revenues shrink 17% annually over the past year By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 13% per year. So while a broad number of companies are forecast to grow, unfortunately Channel Micron Holdings is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Channel Micron Holdings. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Channel Micron Holdings' revenues are expected to grow slower than the wider market. There was also a nice increase in the price target, with the analyst apparently feeling that the intrinsic value of the business is improving. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Channel Micron Holdings after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.