China Aviation Oil (Singapore) Corporation Ltd Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year
Last week, you might have seen that China Aviation Oil (Singapore) Corporation Ltd (SGX:G92) released its full-year result to the market. The early response was not positive, with shares down 3.4% to S$1.14 in the past week. China Aviation Oil (Singapore) reported US$20b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.12 beat expectations, being 7.4% higher than what analysts expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
View our latest analysis for China Aviation Oil (Singapore)
Taking into account the latest results, China Aviation Oil (Singapore)'s four analysts currently expect revenues in 2020 to be US$20.0b, approximately in line with the last 12 months. Statutory earnings per share are forecast to decrease 2.4% to US$0.11 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of US$19.9b and earnings per share (EPS) of US$0.11 in 2020. 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 forecasts for next year.
It might be a surprise to learn that the consensus price target fell 11% to S$1.64, with analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values China Aviation Oil (Singapore) at S$2.11 per share, while the most bearish prices it at S$1.25. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast revenue decline of 1.9% a significant reduction from annual growth of 13% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 4.7% annually for the foreseeable future. It's pretty clear that China Aviation Oil (Singapore)'s revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of China Aviation Oil (Singapore)'s future valuation.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple China Aviation Oil (Singapore) analysts - going out to 2022, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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