Today is shaping up negative for Jiangsu Feiliks International Logistics Inc. (SZSE:300240) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business. Shares are up 6.0% to CN¥6.37 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.
Following this downgrade, Jiangsu Feiliks International Logistics' sole analyst are forecasting 2023 revenues to be CN¥5.4b, approximately in line with the last 12 months. Per-share earnings are expected to shoot up 45% to CN¥0.26. Prior to this update, the analyst had been forecasting revenues of CN¥7.4b and earnings per share (EPS) of CN¥0.36 in 2023. Indeed, we can see that the analyst is a lot more bearish about Jiangsu Feiliks International Logistics' prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for Jiangsu Feiliks International Logistics
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. We would highlight that Jiangsu Feiliks International Logistics' revenue growth is expected to slow, with the forecast 0.3% annualised growth rate until the end of 2023 being well below the historical 20% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 14% annually. Factoring in the forecast slowdown in growth, it seems obvious that Jiangsu Feiliks International Logistics is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Jiangsu Feiliks International Logistics' revenues are expected to grow slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like the analyst has become a lot more bearish on Jiangsu Feiliks International Logistics, and their negativity could be grounds for caution.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, which can be seen 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.