Helens International Holdings Company Limited (HKG:9869) Analysts Are More Bearish Than They Used To Be

The analysts covering Helens International Holdings Company Limited (HKG:9869) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. 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 latest consensus from Helens International Holdings' eight analysts is for revenues of CN¥972m in 2024, which would reflect a credible 3.4% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 103% to CN¥0.16. Prior to this update, the analysts had been forecasting revenues of CN¥1.1b and earnings per share (EPS) of CN¥0.19 in 2024. Indeed, we can see that the analysts are a lot more bearish about Helens International Holdings' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Helens International Holdings

The consensus price target fell 30% to CN¥2.45, with the weaker earnings outlook clearly leading analyst valuation estimates. 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 Helens International Holdings analyst has a price target of CN¥4.15 per share, while the most pessimistic values it at CN¥1.73. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Helens International Holdings' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Helens International Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 3.4% annualised growth until the end of 2024. If achieved, this would be a much better result than the 17% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 12% annually for the foreseeable future. Although Helens International 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales 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 Helens International Holdings.

Worse yet, our risk analysis suggests that Helens International Holdings may find it hard to maintain its dividend following these downgrades. What makes us say that? Learn more by visiting our risks dashboard 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.