Earnings Update: Oversea-Chinese Banking Corporation Limited (SGX:O39) Just Reported Its Third-Quarter Results And Analysts Are Updating Their Forecasts
Last week, you might have seen that Oversea-Chinese Banking Corporation Limited (SGX:O39) released its third-quarter result to the market. The early response was not positive, with shares down 5.3% to S$27.73 in the past week. Revenues came in 3.7% below expectations, at S$3.7b. Statutory earnings per share were relatively better off, with a per-share profit of S$0.45 being roughly in line with analyst estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Oversea-Chinese Banking's 16 analysts is for revenues of S$16.9b in 2027. This reflects a notable 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 11% to S$1.95. Before this earnings report, the analysts had been forecasting revenues of S$17.0b and earnings per share (EPS) of S$1.95 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
View our latest analysis for Oversea-Chinese Banking
There were no changes to revenue or earnings estimates or the price target of S$30.91, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Oversea-Chinese Banking analyst has a price target of S$35.70 per share, while the most pessimistic values it at S$25.00. 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Oversea-Chinese Banking's growth to accelerate, with the forecast 12% annualised growth to the end of 2027 ranking favourably alongside historical growth of 8.8% 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 8.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Oversea-Chinese Banking is expected to grow much faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. 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. 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 Oversea-Chinese Banking analysts - going out to 2028, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for Oversea-Chinese Banking that you need to be mindful of.
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