SAIC Motor Corporation Limited (SHSE:600104) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. The results were mixed; although revenues of CN¥139b fell 16% short of analyst estimates, statutory earnings per share (EPS) of CN¥0.24 beat expectations by 12%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following last week's earnings report, SAIC Motor's 16 analysts are forecasting 2024 revenues to be CN¥745.8b, approximately in line with the last 12 months. Per-share earnings are expected to rise 4.4% to CN¥1.28. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥762.2b and earnings per share (EPS) of CN¥1.30 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
The analysts made no major changes to their price target of CN¥15.25, suggesting the downgrades are not expected to have a long-term impact on SAIC Motor's valuation. 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. The most optimistic SAIC Motor analyst has a price target of CN¥20.90 per share, while the most pessimistic values it at CN¥9.50. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's also worth noting that the years of declining revenue look to have come to an end, with the forecast stauing flat to the end of 2024. Historically, SAIC Motor's top line has shrunk approximately 2.4% annually over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 18% per year. So it's pretty clear that, although revenues are improving, SAIC Motor is still expected to grow slower than the industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for SAIC Motor. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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 in mind, we wouldn't be too quick to come to a conclusion on SAIC Motor. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for SAIC Motor going out to 2026, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with SAIC Motor .
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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.