CMOC Group Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

It's been a good week for CMOC Group Limited (HKG:3993) shareholders, because the company has just released its latest half-yearly results, and the shares gained 4.1% to HK$6.62. The result was positive overall - although revenues of CN¥103b were in line with what the analysts predicted, CMOC Group surprised by delivering a statutory profit of CN¥0.25 per share, modestly greater than expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for CMOC Group

After the latest results, the 21 analysts covering CMOC Group are now predicting revenues of CN¥211.8b in 2024. If met, this would reflect a credible 4.6% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be CN¥0.62, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥207.3b and earnings per share (EPS) of CN¥0.56 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a substantial gain in earnings per share in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of HK$9.32, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. The most optimistic CMOC Group analyst has a price target of HK$11.35 per share, while the most pessimistic values it at HK$7.82. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that CMOC Group's revenue growth is expected to slow, with the forecast 9.5% annualised growth rate until the end of 2024 being well below the historical 21% p.a. growth over the last five years. Compare this to the 53 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 7.7% per year. So it's pretty clear that, while CMOC Group's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around CMOC Group's earnings potential next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at HK$9.32, 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. At Simply Wall St, we have a full range of analyst estimates for CMOC Group going out to 2026, and you can see them free on our platform here..

You can also see whether CMOC Group is carrying too much debt, and whether its balance sheet is healthy, for 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.