Shareholders of Ligao Foods Co.,Ltd. (SZSE:300973) will be pleased this week, given that the stock price is up 14% to CN¥35.82 following its latest quarterly results. Revenues CN¥916m disappointed slightly, at2.7% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of CN¥0.42 coming in 11% above what was anticipated. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the twelve analysts covering Ligao FoodsLtd are now predicting revenues of CN¥4.11b in 2024. If met, this would reflect a decent 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 187% to CN¥1.69. In the lead-up to this report, the analysts had been modelling revenues of CN¥4.45b and earnings per share (EPS) of CN¥2.00 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.
Despite the cuts to forecast earnings, there was no real change to the CN¥47.42 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Ligao FoodsLtd at CN¥70.00 per share, while the most bearish prices it at CN¥32.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the 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. It's clear from the latest estimates that Ligao FoodsLtd's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 15% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Ligao FoodsLtd is expected to grow much faster than its 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at CN¥47.42, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Ligao FoodsLtd 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 2 warning signs for Ligao FoodsLtd (1 is a bit 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.