Compal Electronics, Inc. (TWSE:2324) Second-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

Investors in Compal Electronics, Inc. (TWSE:2324) had a good week, as its shares rose 6.5% to close at NT$32.00 following the release of its second-quarter results. Compal Electronics reported in line with analyst predictions, delivering revenues of NT$237b and statutory earnings per share of NT$1.75, suggesting the business is executing well and in line with its plan. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Compal Electronics

Taking into account the latest results, Compal Electronics' eight analysts currently expect revenues in 2024 to be NT$947.0b, approximately in line with the last 12 months. Statutory earnings per share are predicted to surge 21% to NT$2.49. In the lead-up to this report, the analysts had been modelling revenues of NT$951.8b and earnings per share (EPS) of NT$2.33 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 was unchanged at NT$35.40, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Compal Electronics at NT$40.90 per share, while the most bearish prices it at NT$29.00. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Compal Electronics' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.7% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.3% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 20% per year. Although Compal Electronics' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

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 Compal Electronics 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 Compal Electronics' revenue is expected to perform worse than the wider industry. The consensus price target held steady at NT$35.40, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Compal Electronics going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Compal Electronics you should know about.

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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.