HK$0.56: That's What Analysts Think Sinopec Oilfield Service Corporation (HKG:1033) Is Worth After Its Latest Results

Simply Wall St ·  Mar 29 20:01

Shareholders might have noticed that Sinopec Oilfield Service Corporation (HKG:1033) filed its annual result this time last week. The early response was not positive, with shares down 4.1% to HK$0.47 in the past week. It was an okay result overall, with revenues coming in at CN¥80b, roughly what the analysts had been expecting. 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.

SEHK:1033 Earnings and Revenue Growth March 30th 2024

Following the latest results, Sinopec Oilfield Service's twin analysts are now forecasting revenues of CN¥86.7b in 2024. This would be a meaningful 8.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to plummet 27% to CN¥0.023 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CN¥85.5b and earnings per share (EPS) of CN¥0.024 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The average price target fell 19% to HK$0.56, with reduced earnings forecasts clearly tied to a lower valuation estimate.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sinopec Oilfield Service's past performance and to peers in the same industry. It's clear from the latest estimates that Sinopec Oilfield Service's rate of growth is expected to accelerate meaningfully, with the forecast 8.4% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.3% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 9.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Sinopec Oilfield Service is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sinopec Oilfield Service. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Sinopec Oilfield Service going out as far as 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Sinopec Oilfield Service 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.

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