HKT Trust and HKT Limited Just Missed EPS By 9.0%: Here's What Analysts Think Will Happen Next

HKT Trust and HKT Limited (HKG:6823) just released its latest annual report and things are not looking great. HKT Trust and HKT missed analyst forecasts, with revenues of HK$34b and statutory earnings per share (EPS) of HK$0.63, falling short by 2.2% and 9.0% respectively. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for HKT Trust and HKT

Following the latest results, HKT Trust and HKT's ten analysts are now forecasting revenues of HK$35.3b in 2022. This would be a satisfactory 3.8% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to increase 4.0% to HK$0.66. Yet prior to the latest earnings, the analysts had been anticipated revenues of HK$35.5b and earnings per share (EPS) of HK$0.72 in 2022. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at HK$13.23, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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 HKT Trust and HKT, with the most bullish analyst valuing it at HK$14.30 and the most bearish at HK$11.20 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting HKT Trust and HKT is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that HKT Trust and HKT's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.8% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 0.3% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.7% annually for the foreseeable future. So although HKT Trust and HKT's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for HKT Trust and HKT. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at HK$13.23, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple HKT Trust and HKT analysts - going out to 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for HKT Trust and HKT (1 shouldn't be ignored!) that we have uncovered.

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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.