Kerry Properties Limited Just Missed Earnings - But Analysts Have Updated Their Models

As you might know, Kerry Properties Limited (HKG:683) recently reported its half-year numbers. Results were mixed, with revenues of HK$8.1b exceeding expectations, even as earnings per share (EPS) came up short. Statutory earnings were HK$0.42 per share, -6.7% below whatthe analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the eight analysts covering Kerry Properties provided consensus estimates of HK$18.1b revenue in 2025, which would reflect an uncomfortable 20% decline over the past 12 months. Per-share earnings are expected to shoot up 355% to HK$1.98. Yet prior to the latest earnings, the analysts had been anticipated revenues of HK$17.0b and earnings per share (EPS) of HK$1.94 in 2025. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

See our latest analysis for Kerry Properties

Despite these upgrades,the analysts have not made any major changes to their price target of HK$21.77, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Kerry Properties at HK$24.00 per share, while the most bearish prices it at HK$17.80. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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 revenue is expected to reverse, with a forecast 36% annualised decline to the end of 2025. That is a notable change from historical growth of 6.4% 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 3.4% annually for the foreseeable future. It's pretty clear that Kerry Properties' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Kerry Properties' earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at HK$21.77, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Kerry Properties analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 4 warning signs for Kerry Properties (2 are potentially serious!) that you should be aware of.

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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.