Growth Investors: Industry Analysts Just Upgraded Their Beijing Enterprises Holdings Limited (HKG:392) Revenue Forecasts By 11%

Shareholders in Beijing Enterprises Holdings Limited (HKG:392) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the current consensus from Beijing Enterprises Holdings' four analysts is for revenues of HK$100b in 2023 which - if met - would reflect a meaningful 8.2% increase on its sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of HK$90b in 2023. It looks like there's been a clear increase in optimism around Beijing Enterprises Holdings, given the nice increase in revenue forecasts.

See our latest analysis for Beijing Enterprises Holdings

We'd point out that there was no major changes to their price target of HK$32.22, suggesting the latest estimates were not enough to shift their view on the value of the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Beijing Enterprises Holdings analyst has a price target of HK$39.50 per share, while the most pessimistic values it at HK$24.00. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Beijing Enterprises Holdings'historical trends, as the 8.2% annualised revenue growth to the end of 2023 is roughly in line with the 7.8% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.0% per year. So it's pretty clear that Beijing Enterprises Holdings is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Beijing Enterprises Holdings.

Analysts are clearly in love with Beijing Enterprises Holdings at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as its declining profit margins. You can learn more, and discover the 1 other risk we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks 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.