As you might know, Foran Energy Group Co., Ltd. (SZSE:002911) just kicked off its latest annual results with some very strong numbers. The company beat expectations with revenues of CN¥26b arriving 7.3% ahead of forecasts. Statutory earnings per share (EPS) were CN¥0.80, 8.1% ahead of estimates. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Foran Energy Group after the latest results.

After the latest results, the one analyst covering Foran Energy Group are now predicting revenues of CN¥28.8b in 2024. If met, this would reflect a decent 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 10.0% to CN¥0.94. In the lead-up to this report, the analyst had been modelling revenues of CN¥28.5b and earnings per share (EPS) of CN¥1.00 in 2024. The analyst seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

Althoughthe analyst has revised their earnings forecasts for next year, they've also lifted the consensus price target 7.1% to CN¥14.10, suggesting the revised estimates are not indicative of a weaker long-term future for the business.

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 Foran Energy Group's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2024 being well below the historical 34% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.8% per year. So it's pretty clear that, while Foran Energy Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

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 analyst estimates for Foran Energy Group going out as far as 2026, and you can see them free on our platform here.

Even so, be aware that Foran Energy Group is showing 2 warning signs in our investment analysis , you should know about...

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