Today is shaping up negative for Shandong Nanshan Aluminium Co.,Ltd. (SHSE:600219) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Shares are up 4.3% to CN¥3.15 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

After this downgrade, Shandong Nanshan AluminiumLtd's four analysts are now forecasting revenues of CN¥33b in 2024. This would be a decent 13% improvement in sales compared to the last 12 months. Per-share earnings are expected to swell 11% to CN¥0.33. Previously, the analysts had been modelling revenues of CN¥38b and earnings per share (EPS) of CN¥0.34 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a minor downgrade to EPS estimates to boot.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 13% growth on an annualised basis. That is in line with its 12% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 11% per year. It's clear that while Shandong Nanshan AluminiumLtd's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Shandong Nanshan AluminiumLtd after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Shandong Nanshan AluminiumLtd analysts - going out to 2026, and you can see them free on our platform here.

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