Today is shaping up negative for Guangzhou Great Power Energy and Technology Co., Ltd (SZSE:300438) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the latest consensus from Guangzhou Great Power Energy and Technology's eleven analysts is for revenues of CN¥18b in 2024, which would reflect a huge 118% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 232% to CN¥3.04. Prior to this update, the analysts had been forecasting revenues of CN¥20b and earnings per share (EPS) of CN¥3.29 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a small dip in earnings per share numbers as well.

Check out our latest analysis for Guangzhou Great Power Energy and Technology

The consensus price target fell 5.6% to CN¥56.43, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Guangzhou Great Power Energy and Technology's past performance and to peers in the same industry. It's clear from the latest estimates that Guangzhou Great Power Energy and Technology's rate of growth is expected to accelerate meaningfully, with the forecast 86% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 29% 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 22% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Guangzhou Great Power Energy and Technology to grow faster 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. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Guangzhou Great Power Energy and Technology after today.

There might be good reason for analyst bearishness towards Guangzhou Great Power Energy and Technology, like dilutive stock issuance over the past year. Learn more, and discover the 2 other warning signs we've identified, for 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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