Results: Far Eastern New Century Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

Last week, you might have seen that Far Eastern New Century Corporation (TWSE:1402) released its full-year result to the market. The early response was not positive, with shares down 2.0% to NT$31.70 in the past week. Far Eastern New Century reported NT$257b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of NT$1.64 beat expectations, being 7.4% higher than what the analysts 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.

Check out our latest analysis for Far Eastern New Century

Following the latest results, Far Eastern New Century's three analysts are now forecasting revenues of NT$267.9b in 2024. This would be a credible 4.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 8.2% to NT$1.66. In the lead-up to this report, the analysts had been modelling revenues of NT$263.8b and earnings per share (EPS) of NT$1.70 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at NT$32.67, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on Far Eastern New Century, with the most bullish analyst valuing it at NT$38.00 and the most bearish at NT$30.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Far Eastern New Century is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Far Eastern New Century's growth to accelerate, with the forecast 4.1% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 5.0% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Far Eastern New Century is expected to grow slower than the wider industry.

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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Far Eastern New Century's revenue is 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. At Simply Wall St, we have a full range of analyst estimates for Far Eastern New Century going out to 2025, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Far Eastern New Century you should be aware of.

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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.