Semiconductor Manufacturing International Corporation Just Recorded A 130% EPS Beat: Here's What Analysts Are Forecasting Next

Semiconductor Manufacturing International Corporation (HKG:981) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 2.5% to hit US$1.9b. Semiconductor Manufacturing International also reported a statutory profit of US$0.02, which was an impressive 130% above what the 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Semiconductor Manufacturing International

Taking into account the latest results, the consensus forecast from Semiconductor Manufacturing International's 18 analysts is for revenues of US$7.78b in 2024. This reflects a notable 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 15% to US$0.073. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$7.28b and earnings per share (EPS) of US$0.05 in 2024. So it seems there's been a definite increase in optimism about Semiconductor Manufacturing International's future following the latest results, with a very substantial lift in the earnings per share forecasts in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of HK$18.60, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Semiconductor Manufacturing International, with the most bullish analyst valuing it at HK$24.01 and the most bearish at HK$10.80 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of 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. It's clear from the latest estimates that Semiconductor Manufacturing International's rate of growth is expected to accelerate meaningfully, with the forecast 25% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 18% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Semiconductor Manufacturing International is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Semiconductor Manufacturing International's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at HK$18.60, 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 Semiconductor Manufacturing International analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Semiconductor Manufacturing International (1 is concerning!) that you need to be mindful 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.