The latest analyst coverage could presage a bad day for Luk Fook Holdings (International) Limited (HKG:590), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the consensus from nine analysts covering Luk Fook Holdings (International) is for revenues of HK$12b in 2025, implying a definite 8.1% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to drop 11% to HK$1.90 in the same period. Previously, the analysts had been modelling revenues of HK$15b and earnings per share (EPS) of HK$2.68 in 2025. Indeed, we can see that the analysts are a lot more bearish about Luk Fook Holdings (International)'s prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 10% to HK$17.91.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Luk Fook Holdings (International)'s past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 16% by the end of 2025. This indicates a significant reduction from annual growth of 6.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 15% per year. It's pretty clear that Luk Fook Holdings (International)'s revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Luk Fook Holdings (International). Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Luk Fook Holdings (International)'s revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

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 Luk Fook Holdings (International) going out to 2027, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.