Kerry Logistics Network Limited (HKG:636) Analysts Are Reducing Their Forecasts For This Year

Today is shaping up negative for Kerry Logistics Network Limited (HKG:636) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the latest downgrade, the current consensus, from the seven analysts covering Kerry Logistics Network, is for revenues of HK$57b in 2023, which would reflect a definite 10% reduction in Kerry Logistics Network's sales over the past 12 months. Statutory earnings per share are supposed to tumble 25% to HK$0.65 in the same period. Previously, the analysts had been modelling revenues of HK$65b and earnings per share (EPS) of HK$0.84 in 2023. Indeed, we can see that the analysts are a lot more bearish about Kerry Logistics Network's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Kerry Logistics Network

Despite the cuts to forecast earnings, there was no real change to the HK$13.74 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 10% by the end of 2023. This indicates a significant reduction from annual growth of 20% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 8.5% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Kerry Logistics Network is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Kerry Logistics Network. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Kerry Logistics Network.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Kerry Logistics Network analysts - going out to 2025, and you can see them 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.