Today is shaping up negative for Anhui Conch Cement Company Limited (HKG:914) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the consensus from 14 analysts covering Anhui Conch Cement is for revenues of CN¥101b in 2024, implying a considerable 8.4% decline in sales compared to the last 12 months. Per-share earnings are expected to leap 28% to CN¥1.76. Before this latest update, the analysts had been forecasting revenues of CN¥119b and earnings per share (EPS) of CN¥1.79 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

Analysts made no major changes to their price target of CN¥22.50, suggesting the downgrades are not expected to have a long-term impact on Anhui Conch Cement's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Anhui Conch Cement analyst has a price target of CN¥29.33 per share, while the most pessimistic values it at CN¥14.61. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

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. One more thing stood out to us about these estimates, and it's the idea that Anhui Conch Cement's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 16% to the end of 2024. This tops off a historical decline of 6.5% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.5% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Anhui Conch Cement to suffer worse than the wider 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. Given the stark change in sentiment, we'd understand if investors became more cautious on Anhui Conch Cement after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Anhui Conch Cement 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 with high insider ownership.

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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.