The full-year results for AVIC Shenyang Aircraft Company Limited (SHSE:600760) were released last week, making it a good time to revisit its performance. Revenues came in 6.1% below expectations, at CN¥46b. Statutory earnings per share were relatively better off, with a per-share profit of CN¥1.09 being roughly in line with analyst estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the five analysts covering AVIC Shenyang Aircraft are now predicting revenues of CN¥56.2b in 2024. If met, this would reflect a major 22% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 23% to CN¥1.34. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥60.4b and earnings per share (EPS) of CN¥1.40 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
The average price target climbed 11% to CN¥62.16despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values AVIC Shenyang Aircraft at CN¥64.32 per share, while the most bearish prices it at CN¥60.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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. It's clear from the latest estimates that AVIC Shenyang Aircraft's rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 17% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 22% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that AVIC Shenyang Aircraft is expected to grow at about the same rate as the wider industry.
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. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for AVIC Shenyang Aircraft going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for AVIC Shenyang Aircraft 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.