Hon Hai Precision Industry Co., Ltd. (TWSE:2317) Just Reported And Analysts Have Been Lifting Their Price Targets

Shareholders will be ecstatic, with their stake up 21% over the past week following Hon Hai Precision Industry Co., Ltd.'s (TWSE:2317) latest full-year results. Hon Hai Precision Industry reported NT$6.2t in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of NT$10.07 beat expectations, being 4.9% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Hon Hai Precision Industry after the latest results.

See our latest analysis for Hon Hai Precision Industry

Taking into account the latest results, the current consensus from Hon Hai Precision Industry's 18 analysts is for revenues of NT$6.56t in 2024. This would reflect a credible 6.4% increase on its revenue over the past 12 months. Per-share earnings are expected to expand 10% to NT$11.30. In the lead-up to this report, the analysts had been modelling revenues of NT$6.47t and earnings per share (EPS) of NT$10.83 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target rose 17% to NT$147, suggesting that higher earnings estimates flow through to the stock's valuation as well. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Hon Hai Precision Industry, with the most bullish analyst valuing it at NT$168 and the most bearish at NT$110 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Hon Hai Precision Industry's rate of growth is expected to accelerate meaningfully, with the forecast 6.4% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 5.1% p.a. 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 11% per year. So it's clear that despite the acceleration in growth, Hon Hai Precision Industry is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Hon Hai Precision Industry 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 Hon Hai Precision Industry's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Hon Hai Precision Industry 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 1 warning sign for Hon Hai Precision Industry 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.