Yahoo Finance City Developments Limited Just Missed EPS By 15%: Here's What Analysts Think Will Happen Next
City Developments Limited (SGX:C09) shareholders are probably feeling a little disappointed, since its shares fell 5.6% to S$5.70 in the week after its latest full-year results. City Developments beat revenue forecasts by a solid 19% to hit S$4.9b. Statutory earnings per share fell 15% short of expectations, at S$0.33. 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.
See our latest analysis for City Developments
Taking into account the latest results, the eleven analysts covering City Developments provided consensus estimates of S$3.83b revenue in 2024, which would reflect a disturbing 23% decline over the past 12 months. Per-share earnings are expected to accumulate 7.5% to S$0.38. In the lead-up to this report, the analysts had been modelling revenues of S$3.53b and earnings per share (EPS) of S$0.44 in 2024. While next year's revenue estimates increased, there was also a substantial drop in EPS expectations, suggesting the consensus has a bit of a mixed view of these results.
The consensus price target was unchanged at S$7.75, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic City Developments analyst has a price target of S$10.50 per share, while the most pessimistic values it at S$5.70. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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 23% by the end of 2024. This indicates a significant reduction from annual growth of 4.5% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 0.09% per year. So it's pretty clear that City Developments' revenues are expected to shrink faster than 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 City Developments. They also upgraded their estimates, with revenue apparently performing well, although it is expected to lag the wider industry this year. 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 City Developments analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 3 warning signs for City Developments (of which 1 makes us a bit uncomfortable!) you should know about.
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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.
