The Weichai Power Co., Ltd. (HKG:2338) Third-Quarter Results Are Out And Analysts Have Published New Forecasts

As you might know, Weichai Power Co., Ltd. (HKG:2338) recently reported its third-quarter numbers. It was a pretty good result, with revenues of CN¥49b, and Weichai Power came in a solid 15% ahead of 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. 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 Weichai Power

Taking into account the latest results, the consensus forecast from Weichai Power's 20 analysts is for revenues of CN¥243.6b in 2025. This reflects a notable 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 20% to CN¥1.52. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥244.2b and earnings per share (EPS) of CN¥1.54 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of HK$17.59, showing that the business is executing well and in line with expectations. 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 Weichai Power at HK$22.01 per share, while the most bearish prices it at HK$12.31. 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.

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. The analysts are definitely expecting Weichai Power's growth to accelerate, with the forecast 10% annualised growth to the end of 2025 ranking favourably alongside historical growth of 2.8% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 12% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Weichai Power is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at HK$17.59, 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. We have estimates - from multiple Weichai Power analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Weichai Power , and understanding this should be part of your investment process.

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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.