The New World Development Company Limited (HKG:17) Analysts Have Been Trimming Their Sales Forecasts

The latest analyst coverage could presage a bad day for New World Development Company Limited (HKG:17), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the five analysts covering New World Development provided consensus estimates of HK$43b revenue in 2024, which would reflect a stressful 55% decline on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of HK$84b in 2024. It looks like forecasts have become a fair bit less optimistic on New World Development, given the sizeable cut to revenue estimates.

View our latest analysis for New World Development

There was no particular change to the consensus price target of HK$16.17, with New World Development's latest outlook seemingly not enough to result in a change of valuation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 55% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 2.6% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.2% annually for the foreseeable future. It's pretty clear that New World Development's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for New World Development this year. They also expect company revenue to perform worse than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on New World Development after today.

There might be good reason for analyst bearishness towards New World Development, like its declining profit margins. For more information, you can click here to discover this and the 2 other concerns we've identified.

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.