The analysts might have been a bit too bullish on Juewei Food Co., Ltd. (SHSE:603517), given that the company fell short of expectations when it released its second-quarter results last week. Unfortunately, Juewei Food delivered a serious earnings miss. Revenues of CN¥1.6b were 10% below expectations, and statutory earnings per share of CN¥0.21 missed estimates by 32%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the 13 analysts covering Juewei Food provided consensus estimates of CN¥6.70b revenue in 2024, which would reflect a small 2.9% decline over the past 12 months. Statutory earnings per share are predicted to soar 53% to CN¥0.98. In the lead-up to this report, the analysts had been modelling revenues of CN¥7.58b and earnings per share (EPS) of CN¥1.13 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a real cut to earnings per share numbers as well.
It'll come as no surprise then, to learn that the analysts have cut their price target 13% to CN¥18.51. 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 Juewei Food analyst has a price target of CN¥29.40 per share, while the most pessimistic values it at CN¥10.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
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 revenue is expected to slow, with a forecast annualised decline of 5.8% by the end of 2024. This indicates a significant reduction from annual growth of 8.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Juewei Food is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Juewei Food going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Juewei Food that you should be aware of.
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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.