As you might know, Hongkong Land Holdings Limited (SGX:H78) recently reported its full-year numbers. Sales of US$2.2b surpassed estimates by 7.8%, although statutory earnings per share missed badly, coming in 76% below expectations at US$0.09 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, Hongkong Land Holdings' eleven analysts currently expect revenues in 2023 to be US$2.22b, approximately in line with the last 12 months. Statutory earnings per share are predicted to leap 320% to US$0.38. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.53b and earnings per share (EPS) of US$0.41 in 2023. It looks like sentiment has fallen somewhat in the aftermath of these results, with a real cut to revenue estimates and a small dip in earnings per share numbers as well.
Despite the cuts to forecast earnings, there was no real change to the US$5.26 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 Hongkong Land Holdings at US$7.30 per share, while the most bearish prices it at US$3.60. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hongkong Land Holdings' past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 1.0% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 1.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Hongkong Land 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 Hongkong Land Holdings. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$5.26, with the latest estimates not enough to have an impact on their price targets.
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 Hongkong Land Holdings going out to 2025, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 2 warning signs for Hongkong Land Holdings 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.
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