Tencent Music Entertainment Group Sponsored ADR (TME) looks like an attractive option given the company’s significantly improved earnings prospects. The stock has been performing strongly recently, and the momentum could continue as analysts raise their earnings forecasts for the company.
The stock price should reflect an increasing trend of revised estimates as a result of analysts’ growing optimism about the company’s earnings outlook. After all, empirical research shows a strong correlation between earnings forecast revision trends and short-term stock price movements. Our equity valuation tool, Zacks Rank, is at the core of this insight.
The five-level Zacks Rank system, ranging from Zacks Rank #1 (strong buy) to Zacks Rank #5 (strong sell), has an excellent track record of externally audited performance. Average annual return since 2008 is +25%.
For Tencent Music Entertainment Group-sponsored ADR, there is strong agreement among the analysts covering the company to raise its earnings forecast, which will help boost the consensus forecast for the next quarter and full year significantly.
The chart below shows the evolution of the Zachs Consensus EPS forecast over a 12-month period.
12 months EPS
Revision of quarterly forecast
Earnings guidance of $0.10 per share for the quarter represents a +11.11% change from the number reported a year ago.
In the past 30 days, two estimates of Tencent Music Entertainment Group’s sponsored ADR were higher than without the negative correction. As a result, Zacks Consensus Estimate increased him by 45.46%.
Forecast revision for this fiscal year
The company is expected to earn $0.39 per share for the full year, representing a 0% change from last year’s figures.
There are also encouraging trends for revisions to estimates this year. In the past month, his two estimates of his ADR sponsored by Tencent Music Entertainment Group have risen, but there have been no negative revisions. This resulted in a 25% higher consensus estimate.
Advantageous Zack rank
Thanks to a promising quote correction, Tencent Music Entertainment Group-sponsored ADR now holds Zacks Rank 2 (Buy). Zack Rank is a proven valuation tool that helps investors effectively harness the power of revised earnings forecasts and make the right investment decisions. A complete list of today’s #1 (Strong Buy) Zachs Stocks can be found here.
Our research shows that the #1 (strong buy) and #2 (buy) Zacks ranked stocks significantly outperform the S&P 500.
Conclusion
Tencent Music Entertainment Group Sponsored ADR’s significant revisions to estimates have attracted the right investments, boosting the stock price by 20.2% over the past four weeks, but the stock may still have some upside potential. So consider adding it to your portfolio soon.
Want the latest recommendations from Zacks Investment Research? You can download the 7 Best Stocks for the Next 30 Days today.Click to get this free report
Tencent Music Entertainment Group Sponsored ADR (TME): Free Inventory Analysis Report
Click here to read this article on Zacks.com.
Zacks Investment Research
The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.
Comments
Post a Comment