Shareholders of CMOC Group Limited (HKG:3993) will be pleased this week, given that the stock price is up 19% to HK$6.34 following its latest yearly results. It was an okay report, and revenues came in at CN¥186b, approximately in line with analyst estimates leading up to the results announcement. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the 16 analysts covering CMOC Group are now predicting revenues of CN¥203.9b in 2024. If met, this would reflect a notable 9.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 17% to CN¥0.45. Before this earnings report, the analysts had been forecasting revenues of CN¥200.2b and earnings per share (EPS) of CN¥0.43 in 2024. So the consensus seems to have become somewhat more optimistic on CMOC Group's earnings potential following these results.
There's been no major changes to the consensus price target of HK$6.19, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on CMOC Group, with the most bullish analyst valuing it at HK$7.80 and the most bearish at HK$5.28 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. It's pretty clear that there is an expectation that CMOC Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 9.4% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.3% annually. Even after the forecast slowdown in growth, it seems obvious that CMOC Group is also expected to grow faster 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 CMOC Group's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at HK$6.19, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on CMOC Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple CMOC Group analysts - going out to 2026, and you can see them free on our platform here.
You can also see whether CMOC Group is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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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.