The latest analyst coverage could presage a bad day for Shanghai Titan Scientific Co., Ltd. (SHSE:688133), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. At CN¥30.54, shares are up 6.0% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

After the downgrade, the five analysts covering Shanghai Titan Scientific are now predicting revenues of CN¥3.2b in 2024. If met, this would reflect a meaningful 15% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 101% to CN¥0.85. Before this latest update, the analysts had been forecasting revenues of CN¥3.7b and earnings per share (EPS) of CN¥1.06 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a considerable drop in earnings per share numbers as well.

The consensus price target fell 38% to CN¥36.87, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. It's pretty clear that there is an expectation that Shanghai Titan Scientific's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 16% annually. So it's pretty clear that, while Shanghai Titan Scientific's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Shanghai Titan Scientific. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Shanghai Titan Scientific.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Shanghai Titan Scientific analysts - going out to 2026, 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.