One thing we could say about the analysts on AVIC Heavy Machinery Co., Ltd. (SHSE:600765) - 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 analysts seeing grey clouds on the horizon.

After this downgrade, AVIC Heavy Machinery's three analysts are now forecasting revenues of CN¥12b in 2024. This would be a meaningful 15% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 26% to CN¥1.13. Previously, the analysts had been modelling revenues of CN¥16b and earnings per share (EPS) of CN¥1.38 in 2024. Indeed, we can see that the analysts are a lot more bearish about AVIC Heavy Machinery's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of AVIC Heavy Machinery'shistorical trends, as the 15% annualised revenue growth to the end of 2024 is roughly in line with the 16% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 19% per year. So it's pretty clear that AVIC Heavy Machinery is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on AVIC Heavy Machinery, and a few readers might choose to steer clear of the stock.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with AVIC Heavy Machinery's business, like concerns around earnings quality. Learn more, and discover the 1 other flag we've identified, for 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 that insiders are buying.

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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.