It's been a good week for BOMESC Offshore Engineering Company Limited (SHSE:603727) shareholders, because the company has just released its latest annual results, and the shares gained 8.5% to CN¥13.96. Revenues of CN¥1.8b arrived in line with expectations, although statutory losses per share were CN¥0.27, an impressive 21% smaller than what broker models predicted. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, BOMESC Offshore Engineering's three analysts are now forecasting revenues of CN¥2.47b in 2024. This would be a substantial 37% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with BOMESC Offshore Engineering forecast to report a statutory profit of CN¥0.30 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.44b and earnings per share (EPS) of CN¥0.34 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
Despite cutting their earnings forecasts,the analysts have lifted their price target 5.7% to CN¥18.27, suggesting that these impacts are not expected to weigh on the stock's value in the long term. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic BOMESC Offshore Engineering analyst has a price target of CN¥18.90 per share, while the most pessimistic values it at CN¥17.64. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting BOMESC Offshore Engineering's growth to accelerate, with the forecast 37% annualised growth to the end of 2024 ranking favourably alongside historical growth of 21% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that BOMESC Offshore Engineering is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for BOMESC Offshore Engineering. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on BOMESC Offshore Engineering. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple BOMESC Offshore Engineering analysts - going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for BOMESC Offshore Engineering 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.