Earnings Beat: WH Group Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for WH Group Limited (HKG:288) shareholders, because the company has just released its latest annual results, and the shares gained 2.7% to HK$6.96. It looks like a credible result overall - although revenues of US$26b were in line with what the analysts predicted, WH Group surprised by delivering a statutory profit of US$0.13 per share, a notable 14% above expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on WH Group after the latest results.

After the latest results, the 15 analysts covering WH Group are now predicting revenues of US$26.6b in 2025. If met, this would reflect an okay 2.6% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$0.12, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$26.2b and earnings per share (EPS) of US$0.11 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

See our latest analysis for WH Group

The consensus price target was unchanged at HK$8.38, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 WH Group at HK$15.30 per share, while the most bearish prices it at HK$7.01. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the WH Group's past performance and to peers in the same industry. The analysts are definitely expecting WH Group's growth to accelerate, with the forecast 2.6% annualised growth to the end of 2025 ranking favourably alongside historical growth of 1.0% 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 4.6% per year. So it's clear that despite the acceleration in growth, WH Group is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around WH Group's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that WH Group's revenue is expected to perform worse than the wider industry. The consensus price target held steady at HK$8.38, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for WH Group going out to 2027, and you can see them free on our platform here.

Even so, be aware that WH Group is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

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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.