It's been a good week for WH Group Limited (HKG:288) shareholders, because the company has just released its latest half-yearly results, and the shares gained 7.9% to HK$5.63. Results look mixed - while revenue fell marginally short of analyst estimates at US$12b, statutory earnings were in line with expectations, at US$0.049 per share. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, WH Group's 13 analysts currently expect revenues in 2024 to be US$25.7b, approximately in line with the last 12 months. Statutory earnings per share are predicted to soar 42% to US$0.099. In the lead-up to this report, the analysts had been modelling revenues of US$26.4b and earnings per share (EPS) of US$0.092 in 2024. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

There's been a 7.6% lift in the price target to HK$7.37, with the analysts signalling that the higher earnings forecasts are more relevant to the business than the weaker revenue estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on WH Group, with the most bullish analyst valuing it at HK$14.41 and the most bearish at HK$5.78 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the WH Group's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 2.4% growth on an annualised basis. That is in line with its 2.5% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 5.7% annually. So it's pretty clear that WH Group is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards WH Group following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. With that said, earnings are more important to the long-term value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on WH Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple WH Group analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for WH Group that we have uncovered.

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