Oversea-Chinese Banking Corporation Limited Recorded A 5.1% Miss On Revenue: Analysts Are Revisiting Their Models

Oversea-Chinese Banking Corporation Limited (SGX:O39) missed earnings with its latest annual results, disappointing overly-optimistic forecasters. Results look to have been somewhat negative - revenue fell 5.1% short of analyst estimates at S$14b, and statutory earnings of S$1.67 per share missed forecasts by 2.2%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Following the latest results, Oversea-Chinese Banking's 16 analysts are now forecasting revenues of S$14.8b in 2025. This would be a satisfactory 7.2% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be S$1.69, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of S$14.8b and earnings per share (EPS) of S$1.69 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

See our latest analysis for Oversea-Chinese Banking

There were no changes to revenue or earnings estimates or the price target of S$18.16, suggesting that the company has met expectations in its recent result. 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 Oversea-Chinese Banking analyst has a price target of S$21.50 per share, while the most pessimistic values it at S$15.70. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Oversea-Chinese Banking shareholders.

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. It's pretty clear that there is an expectation that Oversea-Chinese Banking's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.2% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.8% annually. Factoring in the forecast slowdown in growth, it looks like Oversea-Chinese Banking is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at S$18.16, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Oversea-Chinese Banking analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Oversea-Chinese Banking that we have uncovered.

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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.