Delta Electronics, Inc. (TWSE:2308) Just Reported, And Analysts Assigned A NT$344 Price Target

Delta Electronics, Inc. (TWSE:2308) 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 was a credible result overall, with revenues of NT$401b and statutory earnings per share of NT$12.86 both in line with analyst estimates, showing that Delta Electronics is executing in line with expectations. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Delta Electronics

Taking into account the latest results, the current consensus from Delta Electronics' 17 analysts is for revenues of NT$437.4b in 2024. This would reflect a notable 9.0% increase on its revenue over the past 12 months. Per-share earnings are expected to accumulate 2.9% to NT$13.22. Before this earnings report, the analysts had been forecasting revenues of NT$451.3b and earnings per share (EPS) of NT$14.73 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

The consensus price target fell 6.2% to NT$344, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Delta Electronics, with the most bullish analyst valuing it at NT$410 and the most bearish at NT$297 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Delta Electronics' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 9.0% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% annually. Factoring in the forecast slowdown in growth, it looks like Delta Electronics is forecast to grow at about the same rate as 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. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Delta Electronics' future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Delta Electronics going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Delta Electronics that 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.