Today is shaping up negative for Chengxin Lithium Group Co., Ltd. (SZSE:002240) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After the downgrade, the consensus from Chengxin Lithium Group's three analysts is for revenues of CN¥7.2b in 2024, which would reflect a substantial 31% decline in sales compared to the last year of performance. Before the latest update, the analysts were foreseeing CN¥11b of revenue in 2024. It looks like forecasts have become a fair bit less optimistic on Chengxin Lithium Group, given the pretty serious reduction to revenue estimates.
View our latest analysis for Chengxin Lithium Group
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 26% by the end of 2024. This indicates a significant reduction from annual growth of 43% 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 19% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Chengxin Lithium Group is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for next year. They're also anticipating slower revenue growth than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Chengxin Lithium Group, and their negativity could be grounds for caution.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Chengxin Lithium Group's financials, such as concerns around earnings quality. Learn more, and discover the 2 other concerns we've identified, 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
