One Highwealth Construction Corp. (TWSE:2542) Analyst Is Reducing Their Forecasts For Next Year

One thing we could say about the covering analyst on Highwealth Construction Corp. (TWSE:2542) - 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 the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the latest consensus from Highwealth Construction's single analyst is for revenues of NT$83b in 2025, which would reflect a huge 162% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 300% to NT$5.98. Prior to this update, the analyst had been forecasting revenues of NT$100b and earnings per share (EPS) of NT$7.05 in 2025. Indeed, we can see that the analyst is a lot more bearish about Highwealth Construction's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Highwealth Construction

The consensus price target fell 14% to NT$50.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analyst is definitely expecting Highwealth Construction's growth to accelerate, with the forecast 116% annualised growth to the end of 2025 ranking favourably alongside historical growth of 11% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 46% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Highwealth Construction to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Highwealth Construction. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Highwealth Construction.

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 backed by insiders.

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