Shareholders might have noticed that Lier Chemical Co.,LTD. (SZSE:002258) filed its yearly result this time last week. The early response was not positive, with shares down 7.1% to CN¥9.00 in the past week. Revenues were in line with forecasts, at CN¥7.9b, although statutory earnings per share came in 20% below what the analysts expected, at CN¥0.75 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 Lier ChemicalLTD's five analysts is for revenues of CN¥8.67b in 2024. This reflects a decent 10% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 21% to CN¥0.92. In the lead-up to this report, the analysts had been modelling revenues of CN¥9.39b and earnings per share (EPS) of CN¥1.42 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The consensus price target fell 7.1% to CN¥13.00, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Lier ChemicalLTD at CN¥14.00 per share, while the most bearish prices it at CN¥12.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Lier ChemicalLTD's revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2024 being well below the historical 21% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 17% annually. Factoring in the forecast slowdown in growth, it seems obvious that Lier ChemicalLTD 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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 Lier ChemicalLTD's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Lier ChemicalLTD analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Lier ChemicalLTD you should know about.

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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.