Today is shaping up negative for China Taiping Insurance Holdings Company Limited (HKG:966) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. The stock price has risen 8.3% to HK$9.09 over the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the downgrade, the latest consensus from China Taiping Insurance Holdings' eleven analysts is for revenues of HK$236b in 2024, which would reflect a substantial 110% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 34% to HK$2.01. Prior to this update, the analysts had been forecasting revenues of HK$316b and earnings per share (EPS) of HK$2.01 in 2024. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a pretty serious reduction to revenues and reconfirming their earnings per share estimates.

The average price target was steady at HK$9.85 even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that China Taiping Insurance Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 110% annualised growth until the end of 2024. If achieved, this would be a much better result than the 5.2% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 12% annually. Not only are China Taiping Insurance Holdings' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of China Taiping Insurance Holdings going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple China Taiping Insurance Holdings analysts - going out to 2026, and you can see them free on our platform here.

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 with high insider ownership.

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