China Telecom Corporation Limited Just Missed EPS By 13%: Here's What Analysts Think Will Happen Next

China Telecom Corporation Limited (HKG:728) just released its latest interim report and things are not looking great. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥260b, statutory earnings missed forecasts by 13%, coming in at just CN¥0.21 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Following last week's earnings report, China Telecom's 14 analysts are forecasting 2026 revenues to be CN¥521.7b, approximately in line with the last 12 months. Statutory per share are forecast to be CN¥0.32, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of CN¥530.4b and earnings per share (EPS) of CN¥0.33 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

Check out our latest analysis for China Telecom

The consensus price target held steady at HK$5.98, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. There are some variant perceptions on China Telecom, with the most bullish analyst valuing it at HK$8.84 and the most bearish at HK$4.25 per share. 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. It's pretty clear that there is an expectation that China Telecom's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 3.2% growth on an annualised basis. This is compared to a historical growth rate of 4.2% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 2.6% annually. So it's pretty clear that, while China Telecom's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for China Telecom. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on China Telecom. Long-term earnings power is much more important than next year's profits. We have forecasts for China Telecom going out to 2028, 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 China Telecom 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.