As you might know, Luzhou Laojiao Co.,Ltd (SZSE:000568) last week released its latest quarterly, and things did not turn out so great for shareholders. Results look to have been somewhat negative - revenue fell 3.1% short of analyst estimates at CN¥7.7b, and statutory earnings of CN¥2.34 per share missed forecasts by 9.3%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 current consensus from Luzhou LaojiaoLtd's 21 analysts is for revenues of CN¥34.1b in 2024. This would reflect a satisfactory 4.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 7.4% to CN¥10.35. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥35.7b and earnings per share (EPS) of CN¥10.78 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
It'll come as no surprise then, to learn that the analysts have cut their price target 6.6% to CN¥204. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Luzhou LaojiaoLtd, with the most bullish analyst valuing it at CN¥293 and the most bearish at CN¥130 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Luzhou LaojiaoLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 9.8% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. Factoring in the forecast slowdown in growth, it seems obvious that Luzhou LaojiaoLtd is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Luzhou LaojiaoLtd. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Luzhou LaojiaoLtd's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Luzhou LaojiaoLtd analysts - going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Luzhou LaojiaoLtd .
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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.
