Shareholders might have noticed that SAIC Motor Corporation Limited (SHSE:600104) filed its quarterly result this time last week. The early response was not positive, with shares down 3.4% to CN¥12.56 in the past week. The results were mixed; although revenues of CN¥138b fell 10% short of what the analysts had predicted, per-share (statutory) earnings of CN¥0.34 beat expectations by 28%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the 14 analysts covering SAIC Motor provided consensus estimates of CN¥602.1b revenue in 2024, which would reflect a chunky 14% decline over the past 12 months. Statutory earnings per share are forecast to plunge 24% to CN¥0.90 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥731.7b and earnings per share (EPS) of CN¥1.28 in 2024. Indeed, we can see that the analysts are a lot more bearish about SAIC Motor's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
The analysts made no major changes to their price target of CN¥14.53, suggesting the downgrades are not expected to have a long-term impact on SAIC Motor's valuation. 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 SAIC Motor, with the most bullish analyst valuing it at CN¥20.90 and the most bearish at CN¥9.80 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. Over the past five years, revenues have declined around 2.2% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 27% decline in revenue until the end of 2024. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 15% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect SAIC Motor to suffer worse than the wider 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. On the negative side, they also downgraded their revenue estimates, and 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple SAIC Motor analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - SAIC Motor has 1 warning sign we think 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.
