The analysts might have been a bit too bullish on COSCO SHIPPING Energy Transportation Co., Ltd. (HKG:1138), given that the company fell short of expectations when it released its annual results last week. COSCO SHIPPING Energy Transportation missed earnings this time around, with CN¥22b revenue coming in 2.5% below what the analysts had modelled. Statutory earnings per share (EPS) of CN¥0.70 also fell short of expectations by 13%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on COSCO SHIPPING Energy Transportation after the latest results.
Taking into account the latest results, the consensus forecast from COSCO SHIPPING Energy Transportation's seven analysts is for revenues of CN¥27.2b in 2024. This reflects a huge 23% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 81% to CN¥1.27. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥27.1b and earnings per share (EPS) of CN¥1.27 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.
There were no changes to revenue or earnings estimates or the price target of HK$10.63, suggesting that the company has met expectations in its recent result. 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. Currently, the most bullish analyst values COSCO SHIPPING Energy Transportation at HK$12.66 per share, while the most bearish prices it at HK$9.47. 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 COSCO SHIPPING Energy Transportation shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the COSCO SHIPPING Energy Transportation's past performance and to peers in the same industry. It's clear from the latest estimates that COSCO SHIPPING Energy Transportation'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 9.7% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 0.3% per year. So it's clear with the acceleration in growth, COSCO SHIPPING Energy Transportation is expected to grow meaningfully faster than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Their estimates also suggest that COSCO SHIPPING Energy Transportation's revenue is expected to perform better than the wider industry. The consensus price target held steady at HK$10.63, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for COSCO SHIPPING Energy Transportation going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for COSCO SHIPPING Energy Transportation that 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.