Hang Lung Properties Limited Just Missed EPS By 51%: Here's What Analysts Think Will Happen Next

There's been a notable change in appetite for Hang Lung Properties Limited (HKG:101) shares in the week since its interim report, with the stock down 12% to HK$5.55. Results were mixed, with revenues of HK$6.1b exceeding expectations, even as statutory earnings per share (EPS) fell badly short. Earnings were HK$0.23 per share, -51% short of analyst expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Hang Lung Properties

Taking into account the latest results, the most recent consensus for Hang Lung Properties from 14 analysts is for revenues of HK$11.7b in 2024. If met, it would imply an okay 3.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 26% to HK$0.70. Before this earnings report, the analysts had been forecasting revenues of HK$12.1b and earnings per share (EPS) of HK$0.95 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 28% to HK$7.55. 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. Currently, the most bullish analyst values Hang Lung Properties at HK$11.60 per share, while the most bearish prices it at HK$5.30. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Hang Lung Properties' growth to accelerate, with the forecast 7.8% annualised growth to the end of 2024 ranking favourably alongside historical growth of 5.1% 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 5.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Hang Lung Properties to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hang Lung Properties. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Hang Lung Properties. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Hang Lung Properties analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Hang Lung Properties is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com