Today is shaping up negative for Xiamen C&D Inc. (SHSE:600153) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following this downgrade, Xiamen C&D's five analysts are forecasting 2024 revenues to be CN¥756b, approximately in line with the last 12 months. Statutory earnings per share are supposed to nosedive 59% to CN¥1.79 in the same period. Previously, the analysts had been modelling revenues of CN¥944b and earnings per share (EPS) of CN¥2.40 in 2024. Indeed, we can see that the analysts are a lot more bearish about Xiamen C&D's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
It'll come as no surprise then, to learn that the analysts have cut their price target 7.3% to CN¥13.40.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 1.0% by the end of 2024. This indicates a significant reduction from annual growth of 25% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 12% annually for the foreseeable future. It's pretty clear that Xiamen C&D's revenues are expected to perform substantially worse 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 analysts also downgraded their revenue estimates, and industry data suggests that Xiamen C&D's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Xiamen C&D.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Xiamen C&D analysts - going out to 2026, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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.