The analysts covering Shanghai Aiko Solar Energy Co.,Ltd. (SHSE:600732) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the latest consensus from Shanghai Aiko Solar EnergyLtd's eight analysts is for revenues of CN¥19b in 2024, which would reflect a meaningful 17% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 37% to CN¥0.81. Before this latest update, the analysts had been forecasting revenues of CN¥27b and earnings per share (EPS) of CN¥0.68 in 2024. There looks to have been a major change in sentiment regarding Shanghai Aiko Solar EnergyLtd's prospects, with a pretty serious reduction to revenues and the analysts now forecasting a loss instead of a profit.

The consensus price target fell 28% to CN¥13.33, implicitly signalling that lower earnings per share are a leading indicator for Shanghai Aiko Solar EnergyLtd's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shanghai Aiko Solar EnergyLtd's past performance and to peers in the same industry. We would highlight that Shanghai Aiko Solar EnergyLtd's revenue growth is expected to slow, with the forecast 17% annualised growth rate until the end of 2024 being well below the historical 32% 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 22% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Shanghai Aiko Solar EnergyLtd.

The Bottom Line

The biggest low-light for us was that the forecasts for Shanghai Aiko Solar EnergyLtd dropped from profits to a loss this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Shanghai Aiko Solar EnergyLtd'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 Shanghai Aiko Solar EnergyLtd.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Shanghai Aiko Solar EnergyLtd 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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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.