The analysts might have been a bit too bullish on Chongqing Changan Automobile Company Limited (SZSE:000625), given that the company fell short of expectations when it released its annual results last week. It wasn’t a great result overall – while revenue fell marginally short of analyst estimates at CN¥164b, statutory earnings missed forecasts by 19%, coming in at just CN¥0.41 per share. The 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. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Chongqing Changan Automobile after the latest results.
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Taking into account the latest results, the consensus forecast from Chongqing Changan Automobile’s twelve analysts is for revenues of CN¥195.2b in 2026. This reflects a solid 19% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 15% to CN¥0.47. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥197.5b and earnings per share (EPS) of CN¥0.65 in 2026. So there’s definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.
It might be a surprise to learn that the consensus price target fell 8.5% to CN¥12.89, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Chongqing Changan Automobile, with the most bullish analyst valuing it at CN¥16.00 and the most bearish at CN¥9.50 per share. As you can see, analysts are not all in agreement on the stock’s future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. The analysts are definitely expecting Chongqing Changan Automobile’s growth to accelerate, with the forecast 19% annualised growth to the end of 2026 ranking favourably alongside historical growth of 12% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Chongqing Changan Automobile to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it’s tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have estimates – from multiple Chongqing Changan Automobile analysts – going out to 2028, and you can see them free on our platform here.
However, before you get too enthused, we’ve discovered 3 warning signs for Chongqing Changan Automobile (1 can’t be ignored!) 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.