Jiangsu Pacific Quartz Co., Ltd (SHSE:603688) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.
After the upgrade, the four analysts covering Jiangsu Pacific Quartz are now predicting revenues of CN¥9.4b in 2024. If met, this would reflect a major 31% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 23% to CN¥17.23. Prior to this update, the analysts had been forecasting revenues of CN¥8.5b and earnings per share (EPS) of CN¥15.96 in 2024. The forecasts seem more optimistic now, with a substantial gain in revenue and a slight bump in earnings per share estimates.
As a result, it might be a surprise to see that the analysts have cut their price target 7.5% to CN¥114, which could suggest the forecast improvement in performance is not expected to last.
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. It's pretty clear that there is an expectation that Jiangsu Pacific Quartz's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 31% growth on an annualised basis. This is compared to a historical growth rate of 58% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 23% annually. Even after the forecast slowdown in growth, it seems obvious that Jiangsu Pacific Quartz is also expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Jiangsu Pacific Quartz.
Analysts are clearly in love with Jiangsu Pacific Quartz at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as concerns around earnings quality. You can learn more, and discover the 1 other flag we've identified, for free on our platform here.
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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.