One thing we could say about the covering analyst on Fujian Kuncai Material Technology Co., Ltd. (SHSE:603826) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the downgrade, the most recent consensus for Fujian Kuncai Material Technology from its solo analyst is for revenues of CN¥1.3b in 2024 which, if met, would be a sizeable 46% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 30% to CN¥0.18. Previously, the analyst had been modelling revenues of CN¥3.3b and earnings per share (EPS) of CN¥1.30 in 2024. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Despite the cuts to forecast earnings, there was no real change to the CN¥45.00 price target, showing that the analyst don't think the changes have a meaningful impact on its intrinsic value.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analyst is definitely expecting Fujian Kuncai Material Technology's growth to accelerate, with the forecast 46% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Fujian Kuncai Material Technology to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Fujian Kuncai Material Technology. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Fujian Kuncai Material Technology.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Fujian Kuncai Material Technology going out as far as 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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