Pacific Textiles Holdings Limited (HKG:1382) Analysts Are Reducing Their Forecasts For This Year

The latest analyst coverage could presage a bad day for Pacific Textiles Holdings Limited (HKG:1382), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the current consensus from Pacific Textiles Holdings' four analysts is for revenues of HK$4.9b in 2024 which - if met - would reflect a solid 8.5% increase on its sales over the past 12 months. Statutory earnings per share are presumed to soar 90% to HK$0.20. Previously, the analysts had been modelling revenues of HK$5.6b and earnings per share (EPS) of HK$0.31 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Pacific Textiles Holdings

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. One thing stands out from these estimates, which is that Pacific Textiles Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 8.5% annualised growth until the end of 2024. If achieved, this would be a much better result than the 3.5% annual decline 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 revenue grow 11% per year. Although Pacific Textiles Holdings' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Pacific Textiles Holdings' revenues are expected to grow slower than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Pacific Textiles Holdings, and we wouldn't blame shareholders for feeling a little more cautious themselves.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Pacific Textiles Holdings, including its declining profit margins. Learn more, and discover the 2 other flags we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks 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.