These Analysts Just Made A Substantial Downgrade To Their Hang Lung Properties Limited (HKG:101) EPS Forecasts

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. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After the downgrade, the 14 analysts covering Hang Lung Properties are now predicting revenues of HK$13b in 2024. If met, this would reflect a major 22% improvement in sales compared to the last 12 months. Per-share earnings are expected to climb 15% to HK$1.09. Before this latest update, the analysts had been forecasting revenues of HK$14b and earnings per share (EPS) of HK$1.25 in 2024. Indeed, we can see that the analysts are a lot more bearish about Hang Lung Properties' prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Hang Lung Properties

It'll come as no surprise then, to learn that the analysts have cut their price target 11% to HK$13.26.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hang Lung Properties' past performance and to peers in the same industry. The analysts are definitely expecting Hang Lung Properties' growth to accelerate, with the forecast 22% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.1% 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 6.8% 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 issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Hang Lung Properties. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Uncomfortably, our automated valuation tool also suggests that Hang Lung Properties stock could be overvalued following the downgrade. Shareholders could be left disappointed if these estimates play out. You can learn more about our valuation methodology 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.