The analysts covering Shijiazhuang Yiling Pharmaceutical Co., Ltd. (SZSE:002603) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from Shijiazhuang Yiling Pharmaceutical's six analysts is for revenues of CN¥11b in 2024 which - if met - would reflect a substantial 28% increase on its sales over the past 12 months. Per-share earnings are expected to soar 244% to CN¥0.93. Prior to this update, the analysts had been forecasting revenues of CN¥13b and earnings per share (EPS) of CN¥1.48 in 2024. Indeed, we can see that the analysts are a lot more bearish about Shijiazhuang Yiling Pharmaceutical's prospects, administering a measurable 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 26% to CN¥20.09.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Shijiazhuang Yiling Pharmaceutical's rate of growth is expected to accelerate meaningfully, with the forecast 28% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 16% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Shijiazhuang Yiling Pharmaceutical is expected to grow much faster than its 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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Shijiazhuang Yiling Pharmaceutical's financials, such as the risk of cutting its dividend. Learn more, and discover the 1 other concern 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.