Analysts Are More Bearish On Beijing Capital International Airport Company Limited (HKG:694) Than They Used To Be

The latest analyst coverage could presage a bad day for Beijing Capital International Airport Company Limited (HKG:694), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the latest consensus from Beijing Capital International Airport's twelve analysts is for revenues of CN¥4.6b in 2022, which would reflect a major 38% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 40% to CN¥0.28. Yet before this consensus update, the analysts had been forecasting revenues of CN¥5.7b and losses of CN¥0.086 per share in 2022. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

View our latest analysis for Beijing Capital International Airport

There was no major change to the consensus price target of CN¥4.43, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Beijing Capital International Airport analyst has a price target of CN¥7.40 per share, while the most pessimistic values it at CN¥4.00. This is a fairly broad spread of estimates, suggesting that the 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. One thing stands out from these estimates, which is that Beijing Capital International Airport is forecast to grow faster in the future than it has in the past, with revenues expected to display 38% annualised growth until the end of 2022. If achieved, this would be a much better result than the 17% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.5% annually. Not only are Beijing Capital International Airport's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Beijing Capital International Airport. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better 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 Beijing Capital International Airport.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Beijing Capital International Airport analysts - going out to 2024, and you can see them free 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.