Brokers Are Upgrading Their Views On Chow Tai Fook Jewellery Group Limited (HKG:1929) With These New Forecasts

Celebrations may be in order for Chow Tai Fook Jewellery Group Limited (HKG:1929) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. Investor sentiment seems to be improving too, with the share price up 8.8% to HK$16.00 over the past 7 days. Could this big upgrade push the stock even higher?

Following the upgrade, the current consensus from Chow Tai Fook Jewellery Group's 17 analysts is for revenues of HK$84b in 2022 which - if met - would reflect a major 20% increase on its sales over the past 12 months. Per-share earnings are expected to step up 13% to HK$0.68. Previously, the analysts had been modelling revenues of HK$75b and earnings per share (EPS) of HK$0.59 in 2022. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for Chow Tai Fook Jewellery Group

It will come as no surprise to learn that the analysts have increased their price target for Chow Tai Fook Jewellery Group 15% to HK$15.79 on the back of these upgrades. 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 Chow Tai Fook Jewellery Group, with the most bullish analyst valuing it at HK$18.44 and the most bearish at HK$10.20 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Chow Tai Fook Jewellery Group's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 3.7% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 18% per year. Chow Tai Fook Jewellery Group is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue forecasts, although the latest estimates suggest that Chow Tai Fook Jewellery Group will grow in line with the overall market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Chow Tai Fook Jewellery Group could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Chow Tai Fook Jewellery Group analysts - going out to 2024, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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