Investors in Jiugui Liquor Co., Ltd. (SZSE:000799) had a good week, as its shares rose 3.9% to close at CN¥51.09 following the release of its quarterly results. Revenues were CN¥494m, 48% shy of what the analysts were expecting, although statutory earnings of CN¥1.69 per share were roughly in line with what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

After the latest results, the ten analysts covering Jiugui Liquor are now predicting revenues of CN¥2.95b in 2024. If met, this would reflect a credible 4.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 4.1% to CN¥1.76. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.18b and earnings per share (EPS) of CN¥2.29 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 9.6% to CN¥66.38. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Jiugui Liquor at CN¥100.00 per share, while the most bearish prices it at CN¥47.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 Jiugui Liquor's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.6% growth on an annualised basis. This is compared to a historical growth rate of 22% 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 13% per year. Factoring in the forecast slowdown in growth, it seems obvious that Jiugui Liquor is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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 Jiugui Liquor's future valuation.

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 Jiugui Liquor analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Jiugui Liquor (including 1 which is concerning) .

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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.