Beijing Capital International Airport Company Limited (HKG:694) defied analyst predictions to release its interim results, which were ahead of market expectations. Beijing Capital International Airport beat expectations with revenues of CN¥2.0b arriving 2.0% ahead of forecasts. The company also reported a statutory loss of CN¥0.16, 5.3% smaller than was expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the 15 analysts covering Beijing Capital International Airport provided consensus estimates of CN¥5.37b revenue in 2020, which would reflect a measurable 3.6% decline on its sales over the past 12 months. The company is forecast to report a statutory loss of CN¥0.16 in 2020, a sharp decline from a profit over the last year. Yet prior to the latest earnings, the analysts had been forecasting revenues of CN¥5.36b and losses of CN¥0.16 per share in 2020. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
The average price target held steady at CN¥5.30, seeming to indicate that business is performing in line with expectations. 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. There are some variant perceptions on Beijing Capital International Airport, with the most bullish analyst valuing it at CN¥11.84 and the most bearish at CN¥4.06 per share. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with the forecast 3.6% revenue decline a notable change from historical growth of 1.9% 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 13% next year. It's pretty clear that Beijing Capital International Airport's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Beijing Capital International Airport's revenues are expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Beijing Capital International Airport that you need to be mindful of.
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