Time To Worry? Analysts Are Downgrading Their Ningbo Orient Wires & Cables Co.,Ltd. (SHSE:603606) Outlook

Market forces rained on the parade of Ningbo Orient Wires & Cables Co.,Ltd. (SHSE:603606) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the latest consensus from Ningbo Orient Wires & CablesLtd's 16 analysts is for revenues of CN¥8.6b in 2024, which would reflect a solid 18% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 31% to CN¥1.91. Before this latest update, the analysts had been forecasting revenues of CN¥10b and earnings per share (EPS) of CN¥2.40 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

View our latest analysis for Ningbo Orient Wires & CablesLtd

Analysts made no major changes to their price target of CN¥54.24, suggesting the downgrades are not expected to have a long-term impact on Ningbo Orient Wires & CablesLtd's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ningbo Orient Wires & CablesLtd's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Ningbo Orient Wires & CablesLtd'shistorical trends, as the 18% annualised revenue growth to the end of 2024 is roughly in line with the 18% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 18% annually. So although Ningbo Orient Wires & CablesLtd is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider 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 Ningbo Orient Wires & CablesLtd. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Ningbo Orient Wires & CablesLtd.

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 Orient Wires & CablesLtd 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.