It's been a good week for Great Wall Motor Company Limited (HKG:2333) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.3% to HK$11.60. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥43b, statutory earnings were in line with expectations, at CN¥0.82 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from Great Wall Motor's 35 analysts is for revenues of CN¥213.8b in 2024. This would reflect a meaningful 14% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to drop 11% to CN¥1.06 in the same period. Before this earnings report, the analysts had been forecasting revenues of CN¥215.1b and earnings per share (EPS) of CN¥0.99 in 2024. So the consensus seems to have become somewhat more optimistic on Great Wall Motor's earnings potential following these results.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 5.5% to HK$12.89. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Great Wall Motor analyst has a price target of HK$17.01 per share, while the most pessimistic values it at HK$8.37. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Great Wall Motor's growth to accelerate, with the forecast 19% annualised growth to the end of 2024 ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Great Wall Motor 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 Great Wall Motor's earnings potential next year. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Great Wall Motor going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Great Wall Motor 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.