JD Logistics, Inc. (HKG:2618) Analysts Are Cutting Their Estimates: Here's What You Need To Know

Shareholders might have noticed that JD Logistics, Inc. (HKG:2618) filed its first-quarter result this time last week. The early response was not positive, with shares down 3.6% to HK$14.42 in the past week. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on JD Logistics after the latest results.

Check out our latest analysis for JD Logistics

Taking into account the latest results, the consensus forecast from JD Logistics' 16 analysts is for revenues of CN¥124.0b in 2022, which would reflect a notable 13% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 67% to CN¥0.35. Before this earnings announcement, the analysts had been modelling revenues of CN¥131.1b and losses of CN¥0.30 per share in 2022. So it's pretty clear the analysts have mixed opinions on JD Logistics after this update; revenues were downgraded and per-share losses expected to increase.

The average price target fell 12% to HK$26.37, implicitly signalling that lower earnings per share are a leading indicator for JD Logistics' 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 JD Logistics, with the most bullish analyst valuing it at HK$39.47 and the most bearish at HK$17.96 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that JD Logistics' revenue growth is expected to slow, with the forecast 18% annualised growth rate until the end of 2022 being well below the historical 37% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% annually. So it's pretty clear that, while JD Logistics' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded their revenue estimates, although industry data suggests that JD Logistics' revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of JD Logistics' future valuation.

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 JD Logistics going out to 2024, and you can see them free on our platform here..

You still need to take note of risks, for example - JD Logistics has 1 warning sign we think you should be aware of.

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.