The analysts might have been a bit too bullish on Ningbo Orient Wires & Cables Co.,Ltd. (SHSE:603606), given that the company fell short of expectations when it released its full-year results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥7.3b, statutory earnings missed forecasts by 14%, coming in at just CN¥1.45 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Following the latest results, Ningbo Orient Wires & CablesLtd's 16 analysts are now forecasting revenues of CN¥8.62b in 2024. This would be a solid 18% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 31% to CN¥1.91. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥10.3b and earnings per share (EPS) of CN¥2.40 in 2024. Indeed, we can see that the analysts are a lot more bearish about Ningbo Orient Wires & CablesLtd's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.

The analysts made no major changes to their price target of CN¥54.24, suggesting the downgrades are not expected to have a long-term impact on Ningbo Orient Wires & CablesLtd's valuation. 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 Ningbo Orient Wires & CablesLtd analyst has a price target of CN¥71.07 per share, while the most pessimistic values it at CN¥44.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Ningbo Orient Wires & CablesLtd shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Ningbo Orient Wires & CablesLtd'shistorical trends, as the 18% annualised revenue growth to the end of 2024 is roughly in line with the 18% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 18% annually. So although Ningbo Orient Wires & CablesLtd is expected to maintain its revenue growth rate, it's only growing at about the rate of 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. The consensus price target held steady at CN¥54.24, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Ningbo Orient Wires & CablesLtd analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Ningbo Orient Wires & CablesLtd is showing 1 warning sign in our investment analysis , you should know about...

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