Broker Revenue Forecasts For Guangshen Railway Company Limited (HKG:525) Are Surging Higher

Shareholders in Guangshen Railway Company Limited (HKG:525) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The revenue forecast for this year has experienced a facelift, with the analysts now much more optimistic on its sales pipeline. Guangshen Railway has also found favour with investors, with the stock up a notable 24% to HK$1.83 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

After the upgrade, the six analysts covering Guangshen Railway are now predicting revenues of CN¥26b in 2023. If met, this would reflect a huge 25% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CN¥23b in 2023. It looks like there's been a clear increase in optimism around Guangshen Railway, given the substantial gain in revenue forecasts.

View our latest analysis for Guangshen Railway

The consensus price target rose 5.7% to CN¥1.75, with the analysts clearly more optimistic about Guangshen Railway's prospects following this update. 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 Guangshen Railway at CN¥2.40 per share, while the most bearish prices it at CN¥1.18. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Guangshen Railway's growth to accelerate, with the forecast 34% annualised growth to the end of 2023 ranking favourably alongside historical growth of 0.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Guangshen Railway is expected to grow much faster than its industry.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Guangshen Railway this year. They're also forecasting more rapid revenue growth than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Guangshen Railway.

Want to learn more? At least one of Guangshen Railway's six analysts has provided estimates out to 2025, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.