Today is shaping up negative for Gansu Shangfeng Cement Co.,Ltd (SZSE:000672) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the latest downgrade, the three analysts covering Gansu Shangfeng CementLtd provided consensus estimates of CN¥6.4b revenue in 2024, which would reflect a noticeable 6.9% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to shrink 9.5% to CN¥0.76 in the same period. Previously, the analysts had been modelling revenues of CN¥7.1b and earnings per share (EPS) of CN¥1.01 in 2024. Indeed, we can see that the analysts are a lot more bearish about Gansu Shangfeng CementLtd's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
The consensus price target fell 8.8% to CN¥10.30, with the weaker earnings outlook clearly leading analyst valuation estimates.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 6.9% by the end of 2024. This indicates a significant reduction from annual growth of 5.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Gansu Shangfeng CementLtd is expected to lag 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 Gansu Shangfeng CementLtd. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Gansu Shangfeng CementLtd's revenues are expected to grow slower 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Gansu Shangfeng CementLtd going out to 2025, and you can see them free on our platform here.
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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.