Stella International Holdings Limited (HKG:1836) Just Reported And Analysts Have Been Lifting Their Price Targets

Investors in Stella International Holdings Limited (HKG:1836) had a good week, as its shares rose 5.2% to close at HK$17.12 following the release of its interim results. Stella International Holdings reported US$775m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.093 beat expectations, being 3.3% higher than what the analysts expected. 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.

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Following the latest results, Stella International Holdings' twelve analysts are now forecasting revenues of US$1.59b in 2025. This would be a satisfactory 2.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 2.5% to US$0.19. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.60b and earnings per share (EPS) of US$0.20 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Check out our latest analysis for Stella International Holdings

Despite cutting their earnings forecasts,the analysts have lifted their price target 5.1% to HK$17.14, suggesting that these impacts are not expected to weigh on the stock's value in the long term. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Stella International Holdings analyst has a price target of HK$23.21 per share, while the most pessimistic values it at HK$11.50. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Stella International Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 5.3% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 10% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Stella International Holdings is expected to grow slower than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Stella International Holdings. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Stella International Holdings going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Stella International Holdings that we have uncovered.

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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.