News Flash: 13 Analysts Think Hang Lung Properties Limited (HKG:101) Earnings Are Under Threat

The latest analyst coverage could presage a bad day for Hang Lung Properties Limited (HKG:101), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After the downgrade, the 13 analysts covering Hang Lung Properties are now predicting revenues of HK$11b in 2023. If met, this would reflect a modest 6.3% improvement in sales compared to the last 12 months. Per-share earnings are expected to rise 5.0% to HK$1.00. Before this latest update, the analysts had been forecasting revenues of HK$13b and earnings per share (EPS) of HK$1.13 in 2023. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a considerable drop in earnings per share numbers as well.

View our latest analysis for Hang Lung Properties

The consensus price target fell 6.5% to HK$16.49, with the weaker earnings outlook clearly leading analyst valuation estimates. 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$19.60 per share, while the most bearish prices it at HK$14.30. 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. It's clear from the latest estimates that Hang Lung Properties' rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 3.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Hang Lung Properties is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Hang Lung Properties.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Hang Lung Properties going out to 2025, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks 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.