Last week, you might have seen that Weichai Power Co., Ltd. (HKG:2338) released its third-quarter result to the market. The early response was not positive, with shares down 4.4% to HK$23.52 in the past week. It was a workmanlike result, with revenues of CN¥58b coming in 2.4% ahead of expectations, and statutory earnings per share of CN¥0.34, in line with analyst appraisals. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from Weichai Power's 16 analysts is for revenues of CN¥290.7b in 2027. This would reflect a meaningful 20% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 54% to CN¥2.27. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥290.7b and earnings per share (EPS) of CN¥2.27 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
See our latest analysis for Weichai Power
The analysts reconfirmed their price target of HK$47.02, showing that the business is executing well and in line with expectations. 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 Weichai Power analyst has a price target of HK$57.07 per share, while the most pessimistic values it at HK$31.36. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Weichai Power's rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 4.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Weichai Power is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Weichai Power going out to 2028, and you can see them free on our platform here..
You still need to take note of risks, for example - Weichai Power has 1 warning sign we think you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.