One thing we could say about the analysts on China Aerospace Times Electronics CO., LTD. (SHSE:600879) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Surprisingly the share price has been buoyant, rising 11% to CN¥10.18 in the past 7 days. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

Following the downgrade, the current consensus from China Aerospace Times Electronics' six analysts is for revenues of CN¥18b in 2024 which - if met - would reflect a solid 18% increase on its sales over the past 12 months. Per-share earnings are expected to soar 25% to CN¥0.22. Prior to this update, the analysts had been forecasting revenues of CN¥20b and earnings per share (EPS) of CN¥0.23 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a small dip in earnings per share numbers as well.

What's most unexpected is that the consensus price target rose 7.2% to CN¥11.20, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

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 China Aerospace Times Electronics' growth to accelerate, with the forecast 18% annualised growth to the end of 2024 ranking favourably alongside historical growth of 6.3% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 25% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, China Aerospace Times Electronics is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Given the stark change in sentiment, we'd understand if investors became more cautious on China Aerospace Times Electronics after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for China Aerospace Times Electronics going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.