JD Logistics, Inc. Just Beat EPS By 1,251%: Here's What Analysts Think Will Happen Next

It's been a good week for JD Logistics, Inc. (HKG:2618) shareholders, because the company has just released its latest yearly results, and the shares gained 2.3% to HK$7.92. Revenues were CN¥167b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at CN¥0.10, an impressive 1,251% ahead of estimates. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for JD Logistics

Following the latest results, JD Logistics' 15 analysts are now forecasting revenues of CN¥180.2b in 2024. This would be a decent 8.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 182% to CN¥0.28. Before this earnings report, the analysts had been forecasting revenues of CN¥182.6b and earnings per share (EPS) of CN¥0.20 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the very substantial lift in earnings per share expectations following these results.

The average the analysts price target fell 13% to HK$12.34, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic JD Logistics analyst has a price target of HK$21.02 per share, while the most pessimistic values it at HK$8.31. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that JD Logistics' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.2% growth on an annualised basis. This is compared to a historical growth rate of 26% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.5% annually. Even after the forecast slowdown in growth, it seems obvious that JD Logistics is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around JD Logistics' earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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.

With that in mind, we wouldn't be too quick to come to a conclusion on JD Logistics. Long-term earnings power is much more important than next year's profits. We have forecasts for JD Logistics going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months 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.