China Aviation Oil (Singapore) Corporation Ltd (SGX:G92) Analysts Just Cut Their EPS Forecasts Substantially
Market forces rained on the parade of China Aviation Oil (Singapore) Corporation Ltd (SGX:G92) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
After the downgrade, the four analysts covering China Aviation Oil (Singapore) are now predicting revenues of US$17b in 2026. If met, this would reflect a satisfactory 7.0% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to dip 8.8% to US$0.11 in the same period. Prior to this update, the analysts had been forecasting revenues of US$20b and earnings per share (EPS) of US$0.14 in 2026. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.
View our latest analysis for China Aviation Oil (Singapore)
The consensus price target fell 13% to US$1.76, with the weaker earnings outlook clearly leading analyst valuation estimates. 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 Aviation Oil (Singapore), with the most bullish analyst valuing it at US$1.97 and the most bearish at US$1.48 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that China Aviation Oil (Singapore) is forecast to grow faster in the future than it has in the past, with revenues expected to display 7.0% annualised growth until the end of 2026. If achieved, this would be a much better result than the 0.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to decline 0.09% per year. So it's pretty clear that China Aviation Oil (Singapore) is expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, they also downgraded their revenue estimates, and our data indicates sales are expected to outperform the wider market. Even so, earnings per share are more important to the intrinsic value of the business. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
Still, 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 China Aviation Oil (Singapore) going out to 2028, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.