As you might know, Chongqing Changan Automobile Company Limited (SZSE:000625) last week released its latest third-quarter, and things did not turn out so great for shareholders. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (CN¥34b) coming in 25% below what they had expected. Statutory earnings per share of CN¥0.08 fell 56% short. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Chongqing Changan Automobile's 20 analysts are now forecasting revenues of CN¥215.7b in 2025. This would be a major 40% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 83% to CN¥0.93. Before this earnings report, the analysts had been forecasting revenues of CN¥217.0b and earnings per share (EPS) of CN¥0.95 in 2025. 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 CN¥16.94. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Chongqing Changan Automobile analyst has a price target of CN¥24.00 per share, while the most pessimistic values it at CN¥12.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Chongqing Changan Automobile's growth to accelerate, with the forecast 31% annualised growth to the end of 2025 ranking favourably alongside historical growth of 17% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Chongqing Changan Automobile is expected to grow much faster than its 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. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Chongqing Changan Automobile going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for Chongqing Changan Automobile (1 is significant!) that you should be aware of.
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