Fosun Tourism Group (HKG:1992) Just Reported Earnings, And Analysts Cut Their Target Price

Last week, you might have seen that Fosun Tourism Group (HKG:1992) released its half-year result to the market. The early response was not positive, with shares down 5.3% to HK$3.40 in the past week. Revenues came in 3.1% below expectations, at CN¥9.4b. Statutory earnings per share were relatively better off, with a per-share profit of CN¥0.25 being roughly in line with analyst estimates. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Fosun Tourism Group after the latest results.

See our latest analysis for Fosun Tourism Group

Taking into account the latest results, the consensus forecast from Fosun Tourism Group's seven analysts is for revenues of CN¥18.5b in 2024. This reflects a credible 4.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 116% to CN¥0.27. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥19.2b and earnings per share (EPS) of CN¥0.29 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The consensus price target fell 21% to HK$8.08, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Fosun Tourism Group, with the most bullish analyst valuing it at HK$11.53 and the most bearish at HK$5.50 per share. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Fosun Tourism Group's growth to accelerate, with the forecast 9.8% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 12% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Fosun Tourism Group is expected to grow slower 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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 in mind, we wouldn't be too quick to come to a conclusion on Fosun Tourism Group. Long-term earnings power is much more important than next year's profits. We have forecasts for Fosun Tourism Group going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Fosun Tourism Group (1 shouldn't be ignored!) that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.