Shenzhen Tagen Group Co., Ltd. (SZSE:000090) Analysts Are Reducing Their Forecasts For This Year

Market forces rained on the parade of Shenzhen Tagen Group Co., Ltd. (SZSE:000090) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After the downgrade, the three analysts covering Shenzhen Tagen Group are now predicting revenues of CN¥24b in 2024. If met, this would reflect a huge 20% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 29% to CN¥0.57. Prior to this update, the analysts had been forecasting revenues of CN¥28b and earnings per share (EPS) of CN¥0.75 in 2024. Indeed, we can see that the analysts are a lot more bearish about Shenzhen Tagen Group's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Shenzhen Tagen Group

The consensus price target fell 8.9% to CN¥4.96, 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 Tagen Group's past performance and to peers in the same industry. The analysts are definitely expecting Shenzhen Tagen Group's growth to accelerate, with the forecast 20% annualised growth to the end of 2024 ranking favourably alongside historical growth of 15% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shenzhen Tagen Group to grow faster than 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 Shenzhen Tagen Group. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Shenzhen Tagen Group.

A high debt burden combined with a downgrade of this magnitude always gives us some reason for concern, especially if these forecasts are just the first sign of a business downturn. See why we're concerned about Shenzhen Tagen Group's balance sheet by visiting our risks dashboard for free on our platform here.

You can also see our analysis of Shenzhen Tagen Group's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.