Analysts Just Made A Huge Upgrade To Their Maoyan Entertainment (HKG:1896) Forecasts

Maoyan Entertainment (HKG:1896) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The market seems to be pricing in some improvement in the business too, with the stock up 5.2% over the past week, closing at HK$10.28. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

After this upgrade, Maoyan Entertainment's twelve analysts are now forecasting revenues of CN¥4.4b in 2023. This would be a huge 32% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 85% to CN¥0.58. Previously, the analysts had been modelling revenues of CN¥3.9b and earnings per share (EPS) of CN¥0.43 in 2023. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Maoyan Entertainment

With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.6% to CN¥11.48 per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Maoyan Entertainment, with the most bullish analyst valuing it at CN¥14.15 and the most bearish at CN¥9.61 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. For example, we noticed that Maoyan Entertainment's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 32% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 8.1% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 20% annually. Not only are Maoyan Entertainment's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Maoyan Entertainment could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Maoyan Entertainment analysts - going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.