China Railway Group Limited Just Missed Earnings - But Analysts Have Updated Their Models

China Railway Group Limited (SHSE:601390) just released its latest full-year report and things are not looking great. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥1.2t, statutory earnings missed forecasts by 15%, coming in at just CN¥1.08 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on China Railway Group after the latest results.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Following the latest results, China Railway Group's three analysts are now forecasting revenues of CN¥1.21t in 2025. This would be a satisfactory 4.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 2.6% to CN¥1.11. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.28t and earnings per share (EPS) of CN¥1.33 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

Check out our latest analysis for China Railway Group

The analysts made no major changes to their price target of CN¥8.35, suggesting the downgrades are not expected to have a long-term impact on China Railway Group's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values China Railway Group at CN¥11.00 per share, while the most bearish prices it at CN¥7.00. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that China Railway Group's revenue growth is expected to slow, with the forecast 4.3% annualised growth rate until the end of 2025 being well below the historical 6.8% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that China Railway Group is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple China Railway Group analysts - going out to 2027, 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 China Railway Group (at least 1 which is a bit unpleasant) , and understanding these should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.