State Grid Information & Communication Co., Ltd. (SHSE:600131) just released its latest full-year report and things are not looking great. State Grid Information & Communication missed analyst forecasts, with revenues of CN¥8.0b and statutory earnings per share (EPS) of CN¥0.70, falling short by 4.5% and 6.3% respectively. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for State Grid Information & Communication
Taking into account the latest results, the current consensus from State Grid Information & Communication's five analysts is for revenues of CN¥9.88b in 2024. This would reflect a substantial 23% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 27% to CN¥0.88. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥9.92b and earnings per share (EPS) of CN¥0.89 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The consensus price target fell 10% to CN¥18.33, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the annual results. 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. Currently, the most bullish analyst values State Grid Information & Communication at CN¥19.60 per share, while the most bearish prices it at CN¥16.71. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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 State Grid Information & Communication's rate of growth is expected to accelerate meaningfully, with the forecast 23% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% annually. State Grid Information & Communication is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of State Grid Information & Communication's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on State Grid Information & Communication. 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 State Grid Information & Communication going out to 2026, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for State Grid Information & Communication you should know about.
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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.