The latest analyst coverage could presage a bad day for Zhejiang Provincial New Energy Investment Group Co., Ltd. (SHSE:600032), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.
Following the downgrade, the current consensus from Zhejiang Provincial New Energy Investment Group's one analyst is for revenues of CN¥4.8b in 2023 which - if met - would reflect a credible 7.9% increase on its sales over the past 12 months. Statutory earnings per share are presumed to jump 43% to CN¥0.28. Previously, the analyst had been modelling revenues of CN¥5.7b and earnings per share (EPS) of CN¥0.53 in 2023. Indeed, we can see that the analyst is a lot more bearish about Zhejiang Provincial New Energy Investment Group's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for Zhejiang Provincial New Energy Investment Group
The consensus price target fell 21% to CN¥10.50, 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. We would highlight that Zhejiang Provincial New Energy Investment Group's revenue growth is expected to slow, with the forecast 7.9% annualised growth rate until the end of 2023 being well below the historical 25% 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 12% annually. Factoring in the forecast slowdown in growth, it seems obvious that Zhejiang Provincial New Energy Investment Group 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales 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.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Zhejiang Provincial New Energy Investment Group, including dilutive stock issuance over the past year. For more information, you can click here to discover this and the 3 other concerns we've identified.
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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