Investors in Shanghai International Airport Co., Ltd. (SHSE:600009) had a good week, as its shares rose 3.2% to close at CN¥37.64 following the release of its quarterly results. Statutory earnings per share fell badly short of expectations, coming in at CN¥0.16, some 48% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at CN¥3.0b. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Shanghai International Airport's 15 analysts is for revenues of CN¥13.8b in 2024. This reflects a decent 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 94% to CN¥1.11. Before this earnings report, the analysts had been forecasting revenues of CN¥14.2b and earnings per share (EPS) of CN¥1.20 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
The analysts made no major changes to their price target of CN¥41.32, suggesting the downgrades are not expected to have a long-term impact on Shanghai International Airport's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Shanghai International Airport, with the most bullish analyst valuing it at CN¥62.00 and the most bearish at CN¥26.60 per share. 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.
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. For example, we noticed that Shanghai International Airport's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 21% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.7% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.8% annually. So it looks like Shanghai International Airport is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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. At Simply Wall St, we have a full range of analyst estimates for Shanghai International Airport going out to 2026, and you can see them free on our platform here..
You can also see our analysis of Shanghai International Airport's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.