Investors in Nissin Foods Company Limited (HKG:1475) had a good week, as its shares rose 2.1% to close at HK$4.29 following the release of its second-quarter results. Revenues came in 2.2% below expectations, at HK$859m. Statutory earnings per share were relatively better off, with a per-share profit of HK$0.32 being roughly in line with analyst estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Following the latest results, Nissin Foods' four analysts are now forecasting revenues of HK$3.93b in 2024. This would be an okay 5.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 7.6% to HK$0.34. Before this earnings report, the analysts had been forecasting revenues of HK$3.96b and earnings per share (EPS) of HK$0.34 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at HK$5.78. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Nissin Foods at HK$6.60 per share, while the most bearish prices it at HK$4.50. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Nissin Foods' past performance and to peers in the same industry. The analysts are definitely expecting Nissin Foods' growth to accelerate, with the forecast 11% annualised growth to the end of 2024 ranking favourably alongside historical growth of 5.0% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Nissin Foods to grow faster than 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 major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at HK$5.78, 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 Nissin Foods. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Nissin Foods analysts - 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 Nissin Foods 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.