Nanjing Iron & Steel Co., Ltd. (SHSE:600282) just released its latest annual report and things are not looking great. Results look to have been somewhat negative - revenue fell 4.4% short of analyst estimates at CN¥73b, and statutory earnings of CN¥0.34 per share missed forecasts by 9.9%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Nanjing Iron & Steel from four analysts is for revenues of CN¥77.8b in 2024. If met, it would imply an okay 7.3% increase on its revenue over the past 12 months. Per-share earnings are expected to swell 10% to CN¥0.38. In the lead-up to this report, the analysts had been modelling revenues of CN¥81.7b and earnings per share (EPS) of CN¥0.45 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.
The average price target climbed 14% to CN¥5.13despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Nanjing Iron & Steel's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.3% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Nanjing Iron & Steel.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Nanjing Iron & Steel. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Nanjing Iron & Steel analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Nanjing Iron & Steel you should know about.
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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.
