Last week, you might have seen that COSCO SHIPPING Ports Limited (HKG:1199) released its interim result to the market. The early response was not positive, with shares down 6.1% to HK$4.46 in the past week. Revenues came in 3.6% below expectations, at US$710m. Statutory earnings per share were relatively better off, with a per-share profit of US$0.093 being roughly in line with analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on COSCO SHIPPING Ports after the latest results.
Following last week's earnings report, COSCO SHIPPING Ports' five analysts are forecasting 2024 revenues to be US$1.53b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 6.7% to US$0.091. In the lead-up to this report, the analysts had been modelling revenues of US$1.52b and earnings per share (EPS) of US$0.093 in 2024. 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 HK$6.02, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values COSCO SHIPPING Ports at HK$6.69 per share, while the most bearish prices it at HK$5.19. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that COSCO SHIPPING Ports' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.5% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.9% per year. Factoring in the forecast slowdown in growth, it seems obvious that COSCO SHIPPING Ports 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 COSCO SHIPPING Ports. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that COSCO SHIPPING Ports' 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.
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. At Simply Wall St, we have a full range of analyst estimates for COSCO SHIPPING Ports going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for COSCO SHIPPING Ports that we have uncovered.
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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.
