Ausnutria Dairy Corporation Ltd (HKG:1717) just released its latest annual report and things are not looking great. Results showed a clear earnings miss, with CN¥7.4b revenue coming in 4.4% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.097 missed the mark badly, arriving some 42% below what was expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ausnutria Dairy after the latest results.

Taking into account the latest results, the current consensus from Ausnutria Dairy's five analysts is for revenues of CN¥7.99b in 2024. This would reflect a solid 8.2% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 58% to CN¥0.15. Before this earnings report, the analysts had been forecasting revenues of CN¥8.25b and earnings per share (EPS) of CN¥0.22 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

The analysts made no major changes to their price target of HK$3.33, suggesting the downgrades are not expected to have a long-term impact on Ausnutria Dairy's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Ausnutria Dairy, with the most bullish analyst valuing it at HK$4.00 and the most bearish at HK$2.57 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Ausnutria Dairy's growth to accelerate, with the forecast 8.2% annualised growth to the end of 2024 ranking favourably alongside historical growth of 5.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Ausnutria Dairy is expected to grow at about the same rate as 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. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Ausnutria Dairy. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Ausnutria Dairy going out to 2026, and you can see them free on our platform here..

It might also be worth considering whether Ausnutria Dairy's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.