One thing we could say about the analysts on Shanxi Lu'an Environmental Energy Development Co., Ltd. (SHSE:601699) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After the downgrade, the consensus from Shanxi Lu'an Environmental Energy Development's five analysts is for revenues of CN¥38b in 2024, which would reflect a measurable 3.6% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to reduce 5.7% to CN¥1.53 in the same period. Previously, the analysts had been modelling revenues of CN¥42b and earnings per share (EPS) of CN¥2.51 in 2024. Indeed, we can see that the analysts are a lot more bearish about Shanxi Lu'an Environmental Energy Development's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

The consensus price target fell 39% to CN¥16.95, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 3.6% by the end of 2024. This indicates a significant reduction from annual growth of 13% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.8% annually for the foreseeable future. It's pretty clear that Shanxi Lu'an Environmental Energy Development's revenues are expected to perform substantially worse than the wider 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 Shanxi Lu'an Environmental Energy Development. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Shanxi Lu'an Environmental Energy Development's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Shanxi Lu'an Environmental Energy Development.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Shanxi Lu'an Environmental Energy Development 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 with high insider ownership.

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