Suzhou Alton Electrical & Mechanical Industry Co., Ltd. (SZSE:301187) shareholders are probably feeling a little disappointed, since its shares fell 3.5% to CN¥25.74 in the week after its latest half-year results. Revenues came in 3.8% below expectations, at CN¥739m. Statutory earnings per share were relatively better off, with a per-share profit of CN¥0.96 being roughly in line with analyst estimates. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following last week's earnings report, Suzhou Alton Electrical & Mechanical Industry's two analysts are forecasting 2024 revenues to be CN¥1.68b, approximately in line with the last 12 months. Statutory per share are forecast to be CN¥1.29, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of CN¥1.62b and earnings per share (EPS) of CN¥1.24 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.1% to CN¥26.30per share.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.9% by the end of 2024. This indicates a significant reduction from annual growth of 9.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.2% annually for the foreseeable future. It's pretty clear that Suzhou Alton Electrical & Mechanical Industry's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Suzhou Alton Electrical & Mechanical Industry's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. 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 in mind, we wouldn't be too quick to come to a conclusion on Suzhou Alton Electrical & Mechanical Industry. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Suzhou Alton Electrical & Mechanical Industry going out as far as 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 2 warning signs with Suzhou Alton Electrical & Mechanical Industry , and understanding these 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.