The analysts covering Kerry Properties Limited (HKG:683) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After this downgrade, Kerry Properties' nine analysts are now forecasting revenues of HK$15b in 2022. This would be a meaningful 12% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of HK$18b in 2022. The consensus view seems to have become more pessimistic on Kerry Properties, noting the measurable cut to revenue estimates in this update.

View our latest analysis for Kerry Properties

The consensus price target fell 6.5% to HK$24.23, with the analysts clearly less optimistic about Kerry Properties' valuation following this update. 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 Kerry Properties, with the most bullish analyst valuing it at HK$27.00 and the most bearish at HK$20.70 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kerry Properties' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Kerry Properties is forecast to grow faster in the future than it has in the past, with revenues expected to display 25% annualised growth until the end of 2022. If achieved, this would be a much better result than the 19% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 8.7% per year. Not only are Kerry Properties' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Kerry Properties this year. Analysts also expect revenues to grow faster than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Kerry Properties' future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Kerry Properties after today.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Kerry Properties' financials, such as recent substantial insider selling. For more information, you can click here to discover this and the 2 other risks we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.