Analysts Just Shaved Their Ningbo Xusheng Group Co., Ltd. (SHSE:603305) Forecasts Dramatically

One thing we could say about the analysts on Ningbo Xusheng Group Co., Ltd. (SHSE:603305) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

After the downgrade, the twelve analysts covering Ningbo Xusheng Group are now predicting revenues of CN¥5.7b in 2024. If met, this would reflect a solid 20% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to grow 16% to CN¥0.84. Previously, the analysts had been modelling revenues of CN¥6.8b and earnings per share (EPS) of CN¥1.11 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

See our latest analysis for Ningbo Xusheng Group

The consensus price target fell 23% to CN¥18.81, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ningbo Xusheng Group's past performance and to peers in the same industry. We would highlight that Ningbo Xusheng Group's revenue growth is expected to slow, with the forecast 27% annualised growth rate until the end of 2024 being well below the historical 34% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 19% per year. So it's pretty clear that, while Ningbo Xusheng Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Ningbo Xusheng Group.

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 Ningbo Xusheng Group analysts - 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 that insiders are buying.

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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.