Yuexiu Transport Infrastructure Limited Just Missed Earnings - But Analysts Have Updated Their Models

It's been a good week for Yuexiu Transport Infrastructure Limited (HKG:1052) shareholders, because the company has just released its latest annual results, and the shares gained 6.8% to HK$5.21. It was a pretty mixed result, with revenues beating expectations to hit CN¥3.9b. Statutory earnings fell 5.1% short of analyst forecasts, reaching CN¥0.88 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Yuexiu Transport Infrastructure

Following the recent earnings report, the consensus from four analysts covering Yuexiu Transport Infrastructure is for revenues of CN¥3.77b in 2022, implying a discernible 3.0% decline in sales compared to the last 12 months. Per-share earnings are expected to surge 304% to CN¥0.60. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.67b and earnings per share (EPS) of CN¥0.65 in 2022. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a to revenue, the consensus also made a small dip in its earnings per share forecasts.

There's been no major changes to the price target of HK$7.32, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Yuexiu Transport Infrastructure at HK$8.30 per share, while the most bearish prices it at HK$6.01. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. We would highlight that sales are expected to reverse, with a forecast 3.0% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 8.5% 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 5.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Yuexiu Transport Infrastructure 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 Yuexiu Transport Infrastructure. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. The consensus price target held steady at HK$7.32, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Yuexiu Transport Infrastructure going out to 2024, and you can see them free on our platform here..

Even so, be aware that Yuexiu Transport Infrastructure is showing 5 warning signs in our investment analysis , and 3 of those are concerning...

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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.