One Foxconn Technology Co., Ltd. (TWSE:2354) Analyst Is Reducing Their Forecasts For This Year

The analyst covering Foxconn Technology Co., Ltd. (TWSE:2354) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business. The stock price has risen 6.9% to NT$65.30 over the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the downgrade, the consensus from single analyst covering Foxconn Technology is for revenues of NT$56b in 2024, implying a measurable 6.2% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to dip 6.2% to NT$2.88 in the same period. Before this latest update, the analyst had been forecasting revenues of NT$104b and earnings per share (EPS) of NT$5.41 in 2024. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Foxconn Technology

It'll come as no surprise then, to learn that the analyst has cut their price target 9.4% to NT$48.00.

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. Over the past five years, revenues have declined around 6.6% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 8.1% decline in revenue until the end of 2024. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 12% annually. So it's pretty clear that, while it does have declining revenues, the analyst also expect Foxconn Technology to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Foxconn Technology.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.