It's been a good week for Swire Properties Limited (HKG:1972) shareholders, because the company has just released its latest annual results, and the shares gained 4.9% to HK$16.42.       Statutory earnings per share fell badly short of expectations, coming in at HK$0.45, some 64% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at HK$15b.     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.  Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Swire Properties after the latest results.  

SEHK:1972 Earnings and Revenue Growth March 17th 2024

Following the latest results, Swire Properties' 13 analysts are now forecasting revenues of HK$15.2b in 2024. This would be a satisfactory 3.8% improvement in revenue compared to the last 12 months.       Statutory earnings per share are predicted to soar 191% to HK$1.31.        Yet prior to the latest earnings, the analysts had been anticipated revenues of HK$15.4b and earnings per share (EPS) of HK$1.37 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.    

It might be a surprise to learn that the consensus price target was broadly unchanged at HK$19.74, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.        It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean.  There are some variant perceptions on Swire Properties, with the most bullish analyst valuing it at HK$28.50 and the most bearish at HK$16.00 per share.   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.    

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.     For example, we noticed that Swire Properties' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.8% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.5% a year 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 6.7% per year.  Although Swire Properties' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader 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.        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 HK$19.74, 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.   At Simply Wall St, we have a full range of analyst estimates for Swire Properties going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 3 warning signs for Swire Properties (1 is a bit concerning!) that you need to be mindful of.  

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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.