Silk Logistics Holdings Limited (ASX:SLH) Just Reported, And Analysts Assigned A AU$2.37 Price Target

It's been a sad week for Silk Logistics Holdings Limited (ASX:SLH), who've watched their investment drop 15% to AU$1.54 in the week since the company reported its half-yearly result. It was a workmanlike result, with revenues of AU$277m coming in 4.9% ahead of expectations, and statutory earnings per share of AU$0.21, in line with analyst appraisals. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Silk Logistics Holdings

Taking into account the latest results, the consensus forecast from Silk Logistics Holdings' three analysts is for revenues of AU$547.4m in 2024. This reflects a satisfactory 7.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to plummet 28% to AU$0.12 in the same period. In the lead-up to this report, the analysts had been modelling revenues of AU$550.7m and earnings per share (EPS) of AU$0.21 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

It might be a surprise to learn that the consensus price target fell 19% to AU$2.37, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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. Currently, the most bullish analyst values Silk Logistics Holdings at AU$2.65 per share, while the most bearish prices it at AU$2.16. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Silk Logistics Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.0% per year. Even after the forecast slowdown in growth, it seems obvious that Silk Logistics Holdings is also expected to grow faster than 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Silk Logistics Holdings 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 6 warning signs for Silk Logistics Holdings (1 is concerning) you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.