Investors in Hongkong Land Holdings Limited (SGX:H78) had a good week, as its shares rose 5.9% to close at US$5.19 following the release of its half-yearly results. Revenues were US$894m, and Hongkong Land Holdings was a dismal 15% short of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Hongkong Land Holdings

Following the recent earnings report, the consensus from 13 analysts covering Hongkong Land Holdings is for revenues of US$2.27b in 2022, implying a small 5.3% decline in sales compared to the last 12 months. Statutory earnings per share are predicted to grow 10% to US$0.40. Before this earnings report, the analysts had been forecasting revenues of US$2.41b and earnings per share (EPS) of US$0.43 in 2022. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The analysts made no major changes to their price target of US$6.16, suggesting the downgrades are not expected to have a long-term impact on Hongkong Land Holdings' valuation. 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. There are some variant perceptions on Hongkong Land Holdings, with the most bullish analyst valuing it at US$7.80 and the most bearish at US$4.84 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Hongkong Land Holdings shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 10% by the end of 2022. This indicates a significant reduction from annual growth of 3.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.4% per year. It's pretty clear that Hongkong Land Holdings' revenues are expected to perform substantially worse than the wider 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$6.16, 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. We have estimates - from multiple Hongkong Land Holdings analysts - going out to 2024, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Hongkong Land Holdings that you need to take into consideration.

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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.