The analysts might have been a bit too bullish on Zhangzhou Pientzehuang Pharmaceutical., Ltd (SHSE:600436), given that the company fell short of expectations when it released its quarterly results last week. Zhangzhou Pientzehuang Pharmaceutical delivered a grave earnings miss, with both revenues (CN¥2.5b) and statutory earnings per share (CN¥0.93) falling badly short of analyst expectations. 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.

Taking into account the latest results, the current consensus from Zhangzhou Pientzehuang Pharmaceutical's eleven analysts is for revenues of CN¥11.2b in 2024. This would reflect a reasonable 5.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to accumulate 6.4% to CN¥5.25. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥11.2b and earnings per share (EPS) of CN¥5.40 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥266, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Zhangzhou Pientzehuang Pharmaceutical, with the most bullish analyst valuing it at CN¥358 and the most bearish at CN¥170 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 11% growth on an annualised basis. That is in line with its 14% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 12% annually. It's clear that while Zhangzhou Pientzehuang Pharmaceutical'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 the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Zhangzhou Pientzehuang Pharmaceutical. Long-term earnings power is much more important than next year's profits. We have forecasts for Zhangzhou Pientzehuang Pharmaceutical going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Zhangzhou Pientzehuang Pharmaceutical (1 can't be ignored) you should be aware of.

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