Investors in Opple Lighting Co.,LTD (SHSE:603515) had a good week, as its shares rose 7.9% to close at CN¥18.20 following the release of its first-quarter results. It looks like the results were a bit of a negative overall. While revenues of CN¥1.6b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.9% to hit CN¥0.16 per share. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the six analysts covering Opple LightingLTD are now predicting revenues of CN¥8.60b in 2024. If met, this would reflect a meaningful 9.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 8.1% to CN¥1.40. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥8.61b and earnings per share (EPS) of CN¥1.44 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at CN¥22.39, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on Opple LightingLTD, with the most bullish analyst valuing it at CN¥27.17 and the most bearish at CN¥17.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. One thing stands out from these estimates, which is that Opple LightingLTD is forecast to grow faster in the future than it has in the past, with revenues expected to display 12% annualised growth until the end of 2024. If achieved, this would be a much better result than the 1.4% annual decline 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 16% per year. So although Opple LightingLTD's revenue growth is expected to improve, it 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 Opple LightingLTD. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CN¥22.39, with the latest estimates not enough to have an impact on their price targets.
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 estimates - from multiple Opple LightingLTD analysts - going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Opple LightingLTD 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.