Shandong Linglong Tyre Co.,Ltd. (SHSE:601966) shareholders are probably feeling a little disappointed, since its shares fell 7.3% to CN¥22.52 in the week after its latest quarterly results. Revenues were CN¥5.0b, 16% below analyst expectations, although losses didn't appear to worsen significantly, with a statutory per-share loss of CN¥0.95 being in line with what the analysts anticipated. 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. 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 consensus forecast from Shandong Linglong TyreLtd's nine analysts is for revenues of CN¥25.1b in 2024. This reflects a substantial 21% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 34% to CN¥1.48. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥25.4b and earnings per share (EPS) of CN¥1.43 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of CN¥30.82, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. There are some variant perceptions on Shandong Linglong TyreLtd, with the most bullish analyst valuing it at CN¥35.50 and the most bearish at CN¥27.10 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Shandong Linglong TyreLtd's rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shandong Linglong TyreLtd 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 Shandong Linglong TyreLtd's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at CN¥30.82, 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 Shandong Linglong TyreLtd. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Shandong Linglong TyreLtd going out to 2026, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Shandong Linglong TyreLtd 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.