As you might know, Bros Eastern.,Ltd (SHSE:601339) recently reported its yearly numbers. It was not a great result overall. Although revenues beat expectations, hitting CN¥6.9b, statutory earnings missed analyst forecasts by 17%, coming in at just CN¥0.34 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Bros Eastern.Ltd's five analysts is for revenues of CN¥7.63b in 2024. This reflects a meaningful 10% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 21% to CN¥0.41. Before this earnings report, the analysts had been forecasting revenues of CN¥7.60b and earnings per share (EPS) of CN¥0.66 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
The average price target fell 10% to CN¥6.55, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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 Bros Eastern.Ltd analyst has a price target of CN¥7.00 per share, while the most pessimistic values it at CN¥6.15. 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 Bros Eastern.Ltd's rate of growth is expected to accelerate meaningfully, with the forecast 10% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.8% 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 15% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Bros Eastern.Ltd is expected to grow slower than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Bros Eastern.Ltd. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Bros Eastern.Ltd's revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 Bros Eastern.Ltd going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Bros Eastern.Ltd that you need to take into consideration.
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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.