FDC International Hotels Corporation (TWSE:2748) Analysts Are More Bearish Than They Used To Be

One thing we could say about the analysts on FDC International Hotels Corporation (TWSE:2748) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, FDC International Hotels' two analysts are now forecasting revenues of NT$2.6b in 2024. This would be a decent 12% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 48% to NT$3.96. Previously, the analysts had been modelling revenues of NT$3.0b and earnings per share (EPS) of NT$4.91 in 2024. Indeed, we can see that the analysts are a lot more bearish about FDC International Hotels' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for FDC International Hotels

Analysts made no major changes to their price target of NT$92.67, suggesting the downgrades are not expected to have a long-term impact on FDC International Hotels' valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the FDC International Hotels' past performance and to peers in the same industry. The analysts are definitely expecting FDC International Hotels' growth to accelerate, with the forecast 12% annualised growth to the end of 2024 ranking favourably alongside historical growth of 0.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.8% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect FDC International Hotels to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for FDC International Hotels. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on FDC International Hotels after the downgrade.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.