Things Look Grim For CITIC Telecom International Holdings Limited (HKG:1883) After Today's Downgrade

The analysts covering CITIC Telecom International Holdings Limited (HKG:1883) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from two analysts covering CITIC Telecom International Holdings is for revenues of HK$9.3b in 2024, implying a discernible 6.4% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to fall 18% to HK$0.27 in the same period. Before this latest update, the analysts had been forecasting revenues of HK$11b and earnings per share (EPS) of HK$0.36 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for CITIC Telecom International Holdings

It'll come as no surprise then, to learn that the analysts have cut their price target 7.5% to HK$3.68.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CITIC Telecom International Holdings' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 6.4% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 2.9% 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 4.6% annually for the foreseeable future. It's pretty clear that CITIC Telecom International Holdings' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that CITIC Telecom International Holdings' revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for CITIC Telecom International Holdings going out as far as 2026, and you can see them free on our platform here.

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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.