Shanxi Xinghuacun Fen Wine Factory Co.,Ltd. (SHSE:600809) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥7.4b, statutory earnings missed forecasts by 16%, coming in at just CN¥1.76 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Shanxi Xinghuacun Fen Wine FactoryLtd after the latest results.

Taking into account the latest results, the current consensus from Shanxi Xinghuacun Fen Wine FactoryLtd's 22 analysts is for revenues of CN¥38.5b in 2024. This would reflect a reasonable 7.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 6.2% to CN¥10.51. In the lead-up to this report, the analysts had been modelling revenues of CN¥38.5b and earnings per share (EPS) of CN¥10.61 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With no major changes to earnings forecasts, the consensus price target fell 6.4% to CN¥260, suggesting that the analysts might have previously been hoping for an earnings upgrade. 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. The most optimistic Shanxi Xinghuacun Fen Wine FactoryLtd analyst has a price target of CN¥354 per share, while the most pessimistic values it at CN¥158. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shanxi Xinghuacun Fen Wine FactoryLtd's past performance and to peers in the same industry. We would highlight that Shanxi Xinghuacun Fen Wine FactoryLtd's revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2024 being well below the historical 25% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% annually. Even after the forecast slowdown in growth, it seems obvious that Shanxi Xinghuacun Fen Wine FactoryLtd is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Shanxi Xinghuacun Fen Wine FactoryLtd's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Shanxi Xinghuacun Fen Wine FactoryLtd going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Shanxi Xinghuacun Fen Wine FactoryLtd (1 shouldn't be ignored!) that you need to take into consideration.

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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.