Taiwan Union Technology Corporation Just Missed EPS By 6.7%: Here's What Analysts Think Will Happen Next

Taiwan Union Technology Corporation (GTSM:6274) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like the results were a bit of a negative overall. While revenues of NT$18b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 6.7% to hit NT$6.38 per share. 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.

Check out our latest analysis for Taiwan Union Technology

After the latest results, the four analysts covering Taiwan Union Technology are now predicting revenues of NT$21.4b in 2021. If met, this would reflect a solid 19% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to bounce 37% to NT$9.17. Before this earnings report, the analysts had been forecasting revenues of NT$21.2b and earnings per share (EPS) of NT$9.42 in 2021. 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 small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at NT$144, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Taiwan Union Technology analyst has a price target of NT$160 per share, while the most pessimistic values it at NT$130. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Taiwan Union Technology is an easy business to forecast or the the analysts are all using similar assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Taiwan Union Technology's growth to accelerate, with the forecast 19% annualised growth to the end of 2021 ranking favourably alongside historical growth of 7.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Taiwan Union Technology to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Taiwan Union Technology. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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. We have forecasts for Taiwan Union Technology going out to 2023, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Taiwan Union Technology that you need to be mindful of.

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