Investors in Jiangxi Copper Company Limited (HKG:358) had a good week, as its shares rose 5.0% to close at HK$10.22 following the release of its half-yearly results. It was not a great result overall. While revenues of CN¥255b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 15% to hit CN¥1.04 per share. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Jiangxi Copper

Following the recent earnings report, the consensus from nine analysts covering Jiangxi Copper is for revenues of CN¥447.3b in 2022, implying a measurable 5.1% decline in sales compared to the last 12 months. Statutory earnings per share are expected to decrease 9.0% to CN¥1.59 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CN¥446.7b and earnings per share (EPS) of CN¥1.51 in 2022. So the consensus seems to have become somewhat more optimistic on Jiangxi Copper's earnings potential following these results.

The consensus price target fell 7.4% to HK$13.17, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Jiangxi Copper analyst has a price target of HK$24.84 per share, while the most pessimistic values it at HK$7.83. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 9.9% by the end of 2022. This indicates a significant reduction from annual growth of 20% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.0% annually for the foreseeable future. It's pretty clear that Jiangxi Copper's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Jiangxi Copper's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Jiangxi Copper's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Jiangxi Copper analysts - going out to 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - Jiangxi Copper has 1 warning sign we think you should be aware of.

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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.