The analysts covering Bright Dairy & Food Co.,Ltd (SHSE:600597) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the downgrade, the consensus from five analysts covering Bright Dairy & FoodLtd is for revenues of CN¥27b in 2024, implying a discernible 2.9% decline in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 110% to CN¥0.48. Previously, the analysts had been modelling revenues of CN¥32b and earnings per share (EPS) of CN¥0.54 in 2024. Indeed, we can see that the analysts are a lot more bearish about Bright Dairy & FoodLtd's prospects, administering a measurable cut to 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 8.2% to CN¥10.10.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 3.8% by the end of 2024. This indicates a significant reduction from annual growth of 7.2% 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 9.2% annually for the foreseeable future. It's pretty clear that Bright Dairy & FoodLtd'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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Bright Dairy & FoodLtd.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Bright Dairy & FoodLtd analysts - going out to 2026, 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 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.