Beijing Capital International Airport Company Limited (HKG:694) Analysts Just Cut Their EPS Forecasts Substantially

Market forces rained on the parade of Beijing Capital International Airport Company Limited (HKG:694) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After the downgrade, the twelve analysts covering Beijing Capital International Airport are now predicting revenues of CN¥3.9b in 2022. If met, this would reflect a sizeable 43% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 29% to CN¥0.42. Yet prior to the latest estimates, the analysts had been forecasting revenues of CN¥4.3b and losses of CN¥0.31 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¥4.79, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. 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. The most optimistic Beijing Capital International Airport analyst has a price target of CN¥7.28 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Beijing Capital International Airport's past performance and to peers in the same 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 43% annualised growth until the end of 2022. If achieved, this would be a much better result than the 24% 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 11% annually. So it looks like Beijing Capital International Airport is expected to grow faster than its competitors, at least for a while.

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.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Beijing Capital International Airport 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.