Newsflash: AVIC Heavy Machinery Co., Ltd. (SHSE:600765) Analysts Have Been Trimming Their Revenue Forecasts

The latest analyst coverage could presage a bad day for AVIC Heavy Machinery Co., Ltd. (SHSE:600765), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the three analysts covering AVIC Heavy Machinery are now predicting revenues of CN¥12b in 2024. If met, this would reflect a decent 15% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 26% to CN¥1.13. Prior to this update, the analysts had been forecasting revenues of CN¥16b and earnings per share (EPS) of CN¥1.38 in 2024. Indeed, we can see that the analysts are a lot more bearish about AVIC Heavy Machinery's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for AVIC Heavy Machinery

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the AVIC Heavy Machinery's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of AVIC Heavy Machinery'shistorical trends, as the 15% annualised revenue growth to the end of 2024 is roughly in line with the 16% annual revenue growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 19% annually. So it's pretty clear that AVIC Heavy Machinery is expected to grow slower than similar companies in the same 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that AVIC Heavy Machinery's revenues are expected to grow slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on AVIC Heavy Machinery after today.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with AVIC Heavy Machinery's business, like concerns around earnings quality. Learn more, and discover the 1 other flag we've identified, for 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.