Some Analysts Just Cut Their Shenzhen Hopewind Electric Co., Ltd. (SHSE:603063) Estimates

One thing we could say about the analysts on Shenzhen Hopewind Electric Co., Ltd. (SHSE:603063) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After this downgrade, Shenzhen Hopewind Electric's four analysts are now forecasting revenues of CN¥4.6b in 2024. This would be a sizeable 26% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 29% to CN¥1.39. Before this latest update, the analysts had been forecasting revenues of CN¥5.4b and earnings per share (EPS) of CN¥1.51 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

View our latest analysis for Shenzhen Hopewind Electric

The consensus price target fell 14% to CN¥28.30, 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 Shenzhen Hopewind Electric's past performance and to peers in the same industry. The analysts are definitely expecting Shenzhen Hopewind Electric's growth to accelerate, with the forecast 26% annualised growth to the end of 2024 ranking favourably alongside historical growth of 17% 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 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Shenzhen Hopewind Electric is expected to grow much faster than its industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Shenzhen Hopewind Electric. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Shenzhen Hopewind Electric's future valuation. 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 Shenzhen Hopewind Electric after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Shenzhen Hopewind Electric 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.