Need To Know: The Consensus Just Cut Its Anhui Expressway Company Limited (HKG:995) Estimates For 2025

The latest analyst coverage could presage a bad day for Anhui Expressway Company Limited (HKG:995), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

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Following the latest downgrade, the current consensus, from the four analysts covering Anhui Expressway, is for revenues of CN¥6.0b in 2025, which would reflect a sizeable 29% reduction in Anhui Expressway's sales over the past 12 months. Per-share earnings are expected to grow 13% to CN¥1.12. Before this latest update, the analysts had been forecasting revenues of CN¥6.8b and earnings per share (EPS) of CN¥1.11 in 2025. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a substantial drop in revenues and some minor tweaks to earnings numbers.

View our latest analysis for Anhui Expressway

the analysts have also increased their price target 7.7% to CN¥14.56, clearly signalling that lower revenue forecasts this year are not expected to have a material impact on Anhui Expressway's valuation. 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. The most optimistic Anhui Expressway analyst has a price target of CN¥14.74 per share, while the most pessimistic values it at CN¥14.38. This is a very narrow spread of estimates, implying either that Anhui Expressway is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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 a forecast 29% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 23% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.1% annually for the foreseeable future. It's pretty clear that Anhui Expressway's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Anhui Expressway after today.

Unfortunately, the earnings downgrade - if accurate - may also place pressure on Anhui Expressway's mountain of debt, which could lead to some belt tightening for shareholders. To see more of our financial analysis, you can click through to our free platform to learn more about its balance sheet and specific concerns we've identified.

We also provide an overview of the Anhui Expressway Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.