As you might know, HK Electric Investments and HK Electric Investments Limited (HKG:2638) recently reported its full-year numbers. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at HK$11b, statutory earnings beat expectations by a notable 10%, coming in at HK$0.36 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the six analysts covering HK Electric Investments and HK Electric Investments are now predicting revenues of HK$12.1b in 2024. If met, this would reflect a modest 6.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to shrink 3.2% to HK$0.35 in the same period. Before this earnings report, the analysts had been forecasting revenues of HK$12.1b and earnings per share (EPS) of HK$0.35 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at HK$5.85. 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 HK Electric Investments and HK Electric Investments, with the most bullish analyst valuing it at HK$6.40 and the most bearish at HK$5.44 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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. It's clear from the latest estimates that HK Electric Investments and HK Electric Investments' rate of growth is expected to accelerate meaningfully, with the forecast 6.3% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.2% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.4% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect HK Electric Investments and HK Electric Investments to grow faster than the wider industry.
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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at HK$5.85, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on HK Electric Investments and HK Electric Investments. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple HK Electric Investments and HK Electric Investments analysts - going out to 2026, and you can see them free on our platform here.
Even so, be aware that HK Electric Investments and HK Electric Investments is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...
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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.