Hongkong Land Holdings Limited Just Missed Earnings; Here's What Analysts Are Forecasting Now

Hongkong Land Holdings Limited (SGX:H78) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was a pretty negative result overall, with revenues of US$1.8b missing analyst predictions by 6.8%. Worse, the business reported a statutory loss of US$0.26 per share, a substantial decline on analyst expectations of a profit. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Hongkong Land Holdings

Taking into account the latest results, the consensus forecast from Hongkong Land Holdings' eleven analysts is for revenues of US$2.21b in 2024. This reflects a decent 20% improvement in revenue compared to the last 12 months. Hongkong Land Holdings is also expected to turn profitable, with statutory earnings of US$0.33 per share. In the lead-up to this report, the analysts had been modelling revenues of US$2.15b and earnings per share (EPS) of US$0.36 in 2024. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a decent to revenue, the consensus also made a small dip in its earnings per share forecasts.

The analysts also cut Hongkong Land Holdings' price target 5.2% to US$3.71, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in revenue. 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. There are some variant perceptions on Hongkong Land Holdings, with the most bullish analyst valuing it at US$6.10 and the most bearish at US$2.85 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Hongkong Land Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 20% annualised growth until the end of 2024. If achieved, this would be a much better result than the 2.4% 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 1.6% annually. So it looks like Hongkong Land Holdings is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Hongkong Land Holdings' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Hongkong Land Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Hongkong Land Holdings analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Hongkong Land Holdings is showing 1 warning sign in our investment analysis , you should know about...

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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.