Analysts Have Just Cut Their Kerry Properties Limited (HKG:683) Revenue Estimates By 11%

The analysts covering Kerry Properties Limited (HKG:683) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. 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 nine analysts covering Kerry Properties provided consensus estimates of HK$13b revenue in 2023, which would reflect a definite 14% decline on its sales over the past 12 months. Statutory earnings per share are presumed to soar 149% to HK$3.00. Prior to this update, the analysts had been forecasting revenues of HK$15b and earnings per share (EPS) of HK$3.11 in 2023. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a minor downgrade to earnings per share numbers as well.

See our latest analysis for Kerry Properties

The consensus price target fell 6.3% to HK$20.20, with the weaker earnings outlook clearly leading analyst valuation estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would also point out that the forecast 14% annualised revenue decline to the end of 2023 is roughly in line with the historical trend, which saw revenues shrink 12% annually over the past five years By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 11% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Kerry Properties to suffer worse 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 Kerry Properties. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Kerry Properties' future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Kerry Properties going forwards.

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

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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.