The Consensus EPS Estimates For Lufax Holding Ltd (NYSE:LU) Just Fell Dramatically

One thing we could say about the analysts on Lufax Holding Ltd (NYSE:LU) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After the downgrade, the consensus from Lufax Holding's 17 analysts is for revenues of CN¥38b in 2023, which would reflect a stressful 32% decline in sales compared to the last year of performance. Per-share earnings are expected to leap 46% to CN¥1.36. Prior to this update, the analysts had been forecasting revenues of CN¥42b and earnings per share (EPS) of CN¥1.86 in 2023. Indeed, we can see that the analysts are a lot more bearish about Lufax Holding's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Lufax Holding

It'll come as no surprise then, to learn that the analysts have cut their price target 7.9% to CN¥12.13. 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. The most optimistic Lufax Holding analyst has a price target of CN¥19.66 per share, while the most pessimistic values it at CN¥8.75. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 54% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 6.9% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. It's pretty clear that Lufax Holding's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Lufax Holding. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Lufax Holding's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Lufax Holding.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Lufax Holding going out to 2025, and you can see them 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 that insiders are buying.

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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.