Analysts Are More Bearish On Fenbi Ltd. (HKG:2469) Than They Used To Be

One thing we could say about the analysts on Fenbi Ltd. (HKG:2469) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

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After the downgrade, the five analysts covering Fenbi are now predicting revenues of CN¥2.9b in 2025. If met, this would reflect a satisfactory 2.7% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 23% to CN¥0.14. Prior to this update, the analysts had been forecasting revenues of CN¥3.5b and earnings per share (EPS) of CN¥0.24 in 2025. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for Fenbi

It'll come as no surprise then, to learn that the analysts have cut their price target 14% to CN¥3.24. 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. Currently, the most bullish analyst values Fenbi at CN¥3.64 per share, while the most bearish prices it at CN¥2.80. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Fenbi's revenue growth is expected to slow, with the forecast 2.7% annualised growth rate until the end of 2025 being well below the historical 8.2% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it seems obvious that Fenbi is also expected to grow slower than other industry participants.

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 Fenbi's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Fenbi.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Fenbi going out to 2027, and you can see them free on our platform here.

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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.