The Consensus EPS Estimates For China Southern Power Grid Technology Co.,Ltd (SHSE:688248) Just Fell Dramatically

Today is shaping up negative for China Southern Power Grid Technology Co.,Ltd (SHSE:688248) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, China Southern Power Grid TechnologyLtd's seven analysts are now forecasting revenues of CN¥4.5b in 2024. This would be a major 77% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 51% to CN¥0.75. Previously, the analysts had been modelling revenues of CN¥6.2b and earnings per share (EPS) of CN¥1.04 in 2024. Indeed, we can see that the analysts are a lot more bearish about China Southern Power Grid TechnologyLtd's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for China Southern Power Grid TechnologyLtd

The consensus price target fell 8.3% to CN¥33.76, with the weaker earnings outlook clearly leading analyst valuation estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting China Southern Power Grid TechnologyLtd's growth to accelerate, with the forecast 77% annualised growth to the end of 2024 ranking favourably alongside historical growth of 27% 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 19% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that China Southern Power Grid TechnologyLtd 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 China Southern Power Grid TechnologyLtd. 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 China Southern Power Grid TechnologyLtd.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for China Southern Power Grid TechnologyLtd going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.