It's been a good week for Jiugui Liquor Co., Ltd. (SZSE:000799) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.3% to CN¥36.72. It was a credible result overall, with revenues of CN¥500m and statutory earnings per share of CN¥1.69 both in line with analyst estimates, showing that Jiugui Liquor is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the consensus forecast from Jiugui Liquor's nine analysts is for revenues of CN¥2.37b in 2024. This reflects a satisfactory 4.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 71% to CN¥1.30. Before this earnings report, the analysts had been forecasting revenues of CN¥2.59b and earnings per share (EPS) of CN¥1.34 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

It'll come as no surprise then, to learn that the analysts have cut their price target 9.5% to CN¥48.67. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Jiugui Liquor, with the most bullish analyst valuing it at CN¥68.00 and the most bearish at CN¥37.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Jiugui Liquor's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.2% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. Factoring in the forecast slowdown in growth, it seems obvious that Jiugui Liquor is also expected to grow slower than other industry participants.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Jiugui Liquor. Long-term earnings power is much more important than next year's profits. We have forecasts for Jiugui Liquor going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Jiugui Liquor you should be aware of, and 2 of them are a bit unpleasant.

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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.