Today is shaping up negative for Yanlord Land Group Limited (SGX:Z25) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

After the downgrade, the solitary analyst covering Yanlord Land Group is now predicting revenues of CN¥32b in 2023. If met, this would reflect a solid 11% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 41% to CN¥1.12. Before this latest update, the analyst had been forecasting revenues of CN¥36b and earnings per share (EPS) of CN¥1.41 in 2023. Indeed, we can see that the analyst is a lot more bearish about Yanlord Land Group's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Yanlord Land Group

Despite the cuts to forecast earnings, there was no real change to the S$1.22 price target, showing that the analyst don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Yanlord Land Group, with the most bullish analyst valuing it at S$1.43 and the most bearish at S$1.00 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Yanlord Land Group's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 5.8% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Yanlord Land Group to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Yanlord Land Group. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Yanlord Land Group after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Yanlord Land Group going out as far as 2025, 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.