Wistron NeWeb Corporation (TWSE:6285) Just Reported And Analysts Have Been Lifting Their Price Targets

It's been a good week for Wistron NeWeb Corporation (TWSE:6285) shareholders, because the company has just released its latest annual results, and the shares gained 3.7% to NT$156. Wistron NeWeb reported in line with analyst predictions, delivering revenues of NT$111b and statutory earnings per share of NT$8.60, 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Wistron NeWeb after the latest results.

View our latest analysis for Wistron NeWeb

Taking into account the latest results, the current consensus from Wistron NeWeb's four analysts is for revenues of NT$120.3b in 2024. This would reflect a decent 8.6% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 31% to NT$10.29. Yet prior to the latest earnings, the analysts had been anticipated revenues of NT$120.9b and earnings per share (EPS) of NT$10.30 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 5.1% to NT$156despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Wistron NeWeb's earnings by assigning a price premium. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Wistron NeWeb analyst has a price target of NT$200 per share, while the most pessimistic values it at NT$93.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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. We would highlight that Wistron NeWeb's revenue growth is expected to slow, with the forecast 8.6% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 15% 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 Wistron NeWeb.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Wistron NeWeb's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Wistron NeWeb. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Wistron NeWeb analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Wistron NeWeb 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.