This Broker Just Slashed Their Taiwan Surface Mounting Technology Corp. (TWSE:6278) Earnings Forecasts

The analyst covering Taiwan Surface Mounting Technology Corp. (TWSE:6278) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the downgrade, the latest consensus from Taiwan Surface Mounting Technology's solo analyst is for revenues of NT$49b in 2024, which would reflect a credible 2.6% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to sink 11% to NT$8.83 in the same period. Previously, the analyst had been modelling revenues of NT$65b and earnings per share (EPS) of NT$14.95 in 2024. Indeed, we can see that the analyst is a lot more bearish about Taiwan Surface Mounting Technology's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Taiwan Surface Mounting Technology

Despite the cuts to forecast earnings, there was no real change to the NT$126 price target, showing that the analyst don't think the changes have a meaningful impact on its intrinsic value.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Taiwan Surface Mounting Technology's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Taiwan Surface Mounting Technology's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.5% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Taiwan Surface Mounting Technology.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Taiwan Surface Mounting Technology. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Taiwan Surface Mounting Technology's revenues are expected to grow slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Taiwan Surface Mounting Technology.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, 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.