The analysts might have been a bit too bullish on Citic Press Corporation (SZSE:300788), given that the company fell short of expectations when it released its annual results last week. Results showed a clear earnings miss, with CN¥1.7b revenue coming in 7.5% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.61 missed the mark badly, arriving some 35% below what was expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Citic Press' six analysts is for revenues of CN¥1.93b in 2024. This would reflect a meaningful 12% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 36% to CN¥0.83. Before this earnings report, the analysts had been forecasting revenues of CN¥2.22b and earnings per share (EPS) of CN¥1.28 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a pretty serious reduction to earnings per share numbers as well.
The analysts made no major changes to their price target of CN¥32.63, suggesting the downgrades are not expected to have a long-term impact on Citic Press' valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Citic Press, with the most bullish analyst valuing it at CN¥34.67 and the most bearish at CN¥31.10 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Citic Press' past performance and to peers in the same industry. The analysts are definitely expecting Citic Press' growth to accelerate, with the forecast 12% annualised growth to the end of 2024 ranking favourably alongside historical growth of 0.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Citic Press is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Citic Press analysts - 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 3 warning signs for Citic Press (of which 1 is significant!) you should know about.
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