Investors in Café de Coral Holdings Limited (HKG:341) had a good week, as its shares rose 4.8% to close at HK$7.87 following the release of its half-year results. Results were roughly in line with estimates, with revenues of HK$4.3b and statutory earnings per share of HK$0.57. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following last week's earnings report, Café de Coral Holdings' six analysts are forecasting 2025 revenues to be HK$8.64b, approximately in line with the last 12 months. Per-share earnings are expected to soar 28% to HK$0.61. Before this earnings report, the analysts had been forecasting revenues of HK$8.99b and earnings per share (EPS) of HK$0.63 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
Despite the cuts to forecast earnings, there was no real change to the HK$10.06 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 Café de Coral Holdings analyst has a price target of HK$12.30 per share, while the most pessimistic values it at HK$8.88. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.02% by the end of 2025. This indicates a significant reduction from annual growth of 2.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 12% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Café de Coral Holdings is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Café de Coral Holdings. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at HK$10.06, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Café de Coral Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Café de Coral Holdings analysts - going out to 2027, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Café de Coral Holdings 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.
