Wangfujing Group Co., Ltd. (SHSE:600859) just released its latest third-quarter report and things are not looking great. Wangfujing Group delivered a grave earnings miss, with both revenues (CN¥2.5b) and statutory earnings per share (CN¥0.12) falling badly short of analyst expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Wangfujing Group after the latest results.
Taking into account the latest results, the most recent consensus for Wangfujing Group from nine analysts is for revenues of CN¥12.8b in 2025. If met, it would imply a solid 12% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 60% to CN¥0.69. Before this earnings report, the analysts had been forecasting revenues of CN¥13.1b and earnings per share (EPS) of CN¥0.72 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at CN¥16.06, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. The most optimistic Wangfujing Group analyst has a price target of CN¥18.00 per share, while the most pessimistic values it at CN¥14.57. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Wangfujing Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 9.5% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 16% 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 13% annually for the foreseeable future. Although Wangfujing Group's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Wangfujing Group's revenue is expected to perform worse 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Wangfujing Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Wangfujing Group going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Wangfujing Group that you should be aware of.
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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.