Shanghai Flyco Electrical Appliance Co., Ltd. (SHSE:603868) missed earnings with its latest full-year results, disappointing overly-optimistic forecasters. Shanghai Flyco Electrical Appliance missed analyst forecasts, with revenues of CN¥5.1b and statutory earnings per share (EPS) of CN¥2.34, falling short by 4.2% and 3.0% respectively. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Following the latest results, Shanghai Flyco Electrical Appliance's nine analysts are now forecasting revenues of CN¥5.66b in 2024. This would be a meaningful 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 17% to CN¥2.74. In the lead-up to this report, the analysts had been modelling revenues of CN¥6.37b and earnings per share (EPS) of CN¥2.89 in 2024. Indeed, we can see that sentiment has declined measurably after results came out, with a real cut to revenue estimates and a small dip in EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 14% to CN¥65.37. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Shanghai Flyco Electrical Appliance, with the most bullish analyst valuing it at CN¥75.90 and the most bearish at CN¥56.20 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. The analysts are definitely expecting Shanghai Flyco Electrical Appliance's growth to accelerate, with the forecast 12% annualised growth to the end of 2024 ranking favourably alongside historical growth of 6.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 15% annually. So it's clear that despite the acceleration in growth, Shanghai Flyco Electrical Appliance is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shanghai Flyco Electrical Appliance. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Shanghai Flyco Electrical Appliance's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Shanghai Flyco Electrical Appliance going out to 2026, and you can see them free on our platform here..

Even so, be aware that Shanghai Flyco Electrical Appliance is showing 1 warning sign in our investment analysis , 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.