The analysts covering China Southern Power Grid Technology Co.,Ltd (SHSE:688248) 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 most recent consensus for China Southern Power Grid TechnologyLtd from its seven analysts is for revenues of CN¥4.5b in 2024 which, if met, would be a huge 77% increase on its sales over the past 12 months. Statutory earnings per share are presumed to shoot up 51% to CN¥0.75. Before this latest update, the analysts had been forecasting revenues of CN¥6.2b and earnings per share (EPS) of CN¥1.04 in 2024. Indeed, we can see that the analysts are a lot more bearish about China Southern Power Grid TechnologyLtd's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 8.3% to CN¥33.76.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the China Southern Power Grid TechnologyLtd's past performance and to peers in the same industry. It's clear from the latest estimates that China Southern Power Grid TechnologyLtd's rate of growth is expected to accelerate meaningfully, with the forecast 77% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 27% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 19% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect China Southern Power Grid TechnologyLtd to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for China Southern Power Grid TechnologyLtd. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better 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 China Southern Power Grid TechnologyLtd.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for China Southern Power Grid TechnologyLtd 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 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.