SAIC Motor Corporation Limited (SHSE:600104) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like the results were a bit of a negative overall. While revenues of CN¥745b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.8% to hit CN¥1.23 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for SAIC Motor from 16 analysts is for revenues of CN¥776.1b in 2024. If met, it would imply a reasonable 4.2% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 6.3% to CN¥1.32. Before this earnings report, the analysts had been forecasting revenues of CN¥764.8b and earnings per share (EPS) of CN¥1.43 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
The consensus price target held steady at CN¥14.99, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values SAIC Motor at CN¥20.87 per share, while the most bearish prices it at CN¥10.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. For example, we noticed that SAIC Motor's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 4.2% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 3.0% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 20% per year. Although SAIC Motor's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for SAIC Motor. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that SAIC Motor's revenue is expected to perform worse than the wider industry. The consensus price target held steady at CN¥14.99, 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 SAIC Motor. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple SAIC Motor analysts - going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with SAIC Motor .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.