United Microelectronics Corporation (TWSE:2303) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Last week saw the newest first-quarter earnings release from United Microelectronics Corporation (TWSE:2303), an important milestone in the company's journey to build a stronger business. Results overall were respectable, with statutory earnings of NT$0.84 per share roughly in line with what the analysts had forecast. Revenues of NT$55b came in 2.3% ahead of analyst predictions. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for United Microelectronics

Taking into account the latest results, the current consensus from United Microelectronics' 20 analysts is for revenues of NT$235.2b in 2024. This would reflect a modest 5.5% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to fall 16% to NT$3.72 in the same period. In the lead-up to this report, the analysts had been modelling revenues of NT$239.7b and earnings per share (EPS) of NT$4.02 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$55.67, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values United Microelectronics at NT$74.00 per share, while the most bearish prices it at NT$33.00. 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. It's pretty clear that there is an expectation that United Microelectronics' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.4% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 15% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than United Microelectronics.

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 United Microelectronics' revenue is expected to perform worse than the wider industry. The consensus price target held steady at NT$55.67, 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. At Simply Wall St, we have a full range of analyst estimates for United Microelectronics going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for United Microelectronics you should be aware of, and 1 of them can't be ignored.

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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.