News Flash: Analysts Just Made A Massive Upgrade To Their Abbisko Cayman Limited (HKG:2256) Forecasts

Celebrations may be in order for Abbisko Cayman Limited (HKG:2256) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investors have been pretty optimistic on Abbisko Cayman too, with the stock up 26% to HK$7.60 over the past week. Could this upgrade be enough to drive the stock even higher?

After this upgrade, Abbisko Cayman's four analysts are now forecasting revenues of CN¥564m in 2025. This would be a notable 12% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to decline 12% to CN¥0.04 in the same period. Yet before this consensus update, the analysts had been forecasting revenues of CN¥403m and losses of CN¥0.24 per share in 2025. So we can see that this has sparked a pretty clear upgrade to expectations, with higher revenues anticipated to lead to profit sooner than previously forecast.

See our latest analysis for Abbisko Cayman

With these upgrades, we're not surprised to see that the analysts have lifted their price target 17% to CN¥10.06 per share. 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 Abbisko Cayman analyst has a price target of CN¥16.83 per share, while the most pessimistic values it at CN¥6.32. We would probably assign less value to the forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on 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 Abbisko Cayman's past performance and to peers in the same industry. We would highlight that Abbisko Cayman's revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2025 being well below the historical 80% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 29% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Abbisko Cayman.

The Bottom Line

The most important thing to take away from this upgrade is that there is now an expectation for Abbisko Cayman to become profitable this year, compared to previous expectations of a loss. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Abbisko Cayman.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Abbisko Cayman going out to 2027, and you can see them 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.