Last week saw the newest half-year earnings release from Milkyway Chemical Supply Chain Service Co., Ltd. (SHSE:603713), an important milestone in the company's journey to build a stronger business. Results overall were respectable, with statutory earnings of CN¥2.66 per share roughly in line with what the analysts had forecast. Revenues of CN¥3.2b came in 8.3% ahead of analyst predictions. 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.

Check out our latest analysis for Milkyway Chemical Supply Chain Service

Taking into account the latest results, the current consensus from Milkyway Chemical Supply Chain Service's four analysts is for revenues of CN¥13.7b in 2022, which would reflect a meaningful 19% increase on its sales over the past 12 months. Statutory earnings per share are predicted to surge 22% to CN¥4.08. Before this earnings report, the analysts had been forecasting revenues of CN¥13.8b and earnings per share (EPS) of CN¥3.90 in 2022. So the consensus seems to have become somewhat more optimistic on Milkyway Chemical Supply Chain Service's earnings potential following these results.

There's been no major changes to the consensus price target of CN¥167, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. The most optimistic Milkyway Chemical Supply Chain Service analyst has a price target of CN¥186 per share, while the most pessimistic values it at CN¥149. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Milkyway Chemical Supply Chain Service's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 43% growth on an annualised basis. This is compared to a historical growth rate of 61% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 16% annually. So it's pretty clear that, while Milkyway Chemical Supply Chain Service's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Milkyway Chemical Supply Chain Service's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Milkyway Chemical Supply Chain Service. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Milkyway Chemical Supply Chain Service going out to 2024, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Milkyway Chemical Supply Chain Service , and understanding this should be part of your investment process.

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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.