Investors in Weichai Power Co., Ltd. (HKG:2338) had a good week, as its shares rose 3.0% to close at HK$12.34 following the release of its quarterly results. The result was fairly weak overall, with revenues of CN¥56b being 4.3% less than what the analysts had been modelling. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Taking into account the latest results, the most recent consensus for Weichai Power from 19 analysts is for revenues of CN¥229.8b in 2024. If met, it would imply a satisfactory 4.3% increase on its revenue over the past 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥231.4b and earnings per share (EPS) of CN¥1.36 in 2024. So we can see that while the consensus made no real change to its revenue estimates, it also no longer provides an earnings per share estimate. This suggests that revenues are what the market is focusing on after the latest results.

We'd also point out that thatthe analysts have made no major changes to their price target of HK$18.81. 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. There are some variant perceptions on Weichai Power, with the most bullish analyst valuing it at HK$23.18 and the most bearish at HK$12.93 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Weichai Power's rate of growth is expected to accelerate meaningfully, with the forecast 8.8% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 12% annually. So it's clear that despite the acceleration in growth, Weichai Power is expected to grow meaningfully slower than the industry average.

The Bottom Line

The clear take away from these updates is that the analysts made no change to their revenue estimates for next year, with the business apparently performing in line with their models. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.

At least one of Weichai Power's 19 analysts has provided estimates out to 2026, which can be seen for free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Weichai Power 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.