It's shaping up to be a tough period for Ningbo Haitian Precision Machinery Co.,Ltd. (SHSE:601882), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥922m missed by 20%, and statutory earnings per share of CN¥0.31 fell short of forecasts by 23%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, Ningbo Haitian Precision MachineryLtd's six analysts are now forecasting revenues of CN¥3.75b in 2024. This would be a meaningful 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 17% to CN¥1.30. In the lead-up to this report, the analysts had been modelling revenues of CN¥3.87b and earnings per share (EPS) of CN¥1.38 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.
It'll come as no surprise then, to learn that the analysts have cut their price target 9.5% to CN¥31.52. 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. Currently, the most bullish analyst values Ningbo Haitian Precision MachineryLtd at CN¥35.50 per share, while the most bearish prices it at CN¥24.07. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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 clear from the latest estimates that Ningbo Haitian Precision MachineryLtd's rate of growth is expected to accelerate meaningfully, with the forecast 28% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 23% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ningbo Haitian Precision MachineryLtd to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ningbo Haitian Precision MachineryLtd. They also downgraded Ningbo Haitian Precision MachineryLtd's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Ningbo Haitian Precision MachineryLtd. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Ningbo Haitian Precision MachineryLtd going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Ningbo Haitian Precision MachineryLtd , and understanding this should be part of your investment process.
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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.
