Earnings Miss: Chow Tai Fook Jewellery Group Limited Missed EPS By 17% And Analysts Are Revising Their Forecasts

It's been a sad week for Chow Tai Fook Jewellery Group Limited (HKG:1929), who've watched their investment drop 12% to HK$8.62 in the week since the company reported its full-year result. Revenues were in line with forecasts, at HK$109b, although statutory earnings per share came in 17% below what the analysts expected, at HK$0.65 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Chow Tai Fook Jewellery Group

Taking into account the latest results, Chow Tai Fook Jewellery Group's 21 analysts currently expect revenues in 2025 to be HK$107.7b, approximately in line with the last 12 months. Statutory earnings per share are predicted to jump 28% to HK$0.84. Yet prior to the latest earnings, the analysts had been anticipated revenues of HK$117.9b and earnings per share (EPS) of HK$0.88 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

It'll come as no surprise then, to learn that the analysts have cut their price target 9.9% to HK$12.83. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Chow Tai Fook Jewellery Group at HK$18.60 per share, while the most bearish prices it at HK$7.20. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.9% by the end of 2025. This indicates a significant reduction from annual growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.3% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Chow Tai Fook Jewellery Group is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Chow Tai Fook Jewellery Group. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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. At Simply Wall St, we have a full range of analyst estimates for Chow Tai Fook Jewellery Group going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 2 warning signs for Chow Tai Fook Jewellery Group that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com