New Forecasts: Here's What Analysts Think The Future Holds For Joy City Property Limited (HKG:207)

Celebrations may be in order for Joy City Property Limited (HKG:207) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Joy City Property will make substantially more sales than they'd previously expected.

After this upgrade, Joy City Property's three analysts are now forecasting revenues of CN¥16b in 2021. This would be a notable 12% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CN¥14b in 2021. The consensus has definitely become more optimistic, showing a nice increase in revenue forecasts.

View our latest analysis for Joy City Property

The consensus price target rose 6.1% to HK$0.95, with the analysts clearly more optimistic about Joy City Property's prospects following this update. 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. There are some variant perceptions on Joy City Property, with the most bullish analyst valuing it at HK$1.77 and the most bearish at HK$0.50 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Joy City Property's past performance and to peers in the same industry. The period to the end of 2021 brings more of the same, according to the analysts, with revenue forecast to display 12% growth on an annualised basis. That is in line with its 10% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 14% per year. It's clear that while Joy City Property's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Joy City Property this year. The analysts also expect revenues to grow approximately in line with the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Joy City Property.

Analysts are clearly in love with Joy City Property at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as its declining profit margins. You can learn more, and discover the 2 other concerns we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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