Earnings Miss: SJM Holdings Limited Missed EPS By 98% And Analysts Are Revising Their Forecasts

Last week saw the newest full-year earnings release from SJM Holdings Limited (HKG:880), an important milestone in the company's journey to build a stronger business. It looks like a pretty bad result, all things considered. Although revenues of HK$29b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 98% to hit HK$0.0004 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for SJM Holdings

Following the latest results, SJM Holdings' eleven analysts are now forecasting revenues of HK$31.1b in 2025. This would be a decent 8.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 21,164% to HK$0.096. Yet prior to the latest earnings, the analysts had been anticipated revenues of HK$31.1b and earnings per share (EPS) of HK$0.14 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.

The consensus price target held steady at HK$3.23, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 SJM Holdings at HK$7.15 per share, while the most bearish prices it at HK$2.05. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. The analysts are definitely expecting SJM Holdings' growth to accelerate, with the forecast 8.1% annualised growth to the end of 2025 ranking favourably alongside historical growth of 6.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, SJM 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 SJM Holdings. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that SJM Holdings' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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. At Simply Wall St, we have a full range of analyst estimates for SJM Holdings going out to 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for SJM Holdings you should know about.

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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.