News Flash: 21 Analysts Think Zhejiang Sanhua Intelligent Controls Co.,Ltd (SZSE:002050) Earnings Are Under Threat

Market forces rained on the parade of Zhejiang Sanhua Intelligent Controls Co.,Ltd (SZSE:002050) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the current consensus from Zhejiang Sanhua Intelligent ControlsLtd's 21 analysts is for revenues of CN¥29b in 2024 which - if met - would reflect a decent 13% increase on its sales over the past 12 months. Statutory earnings per share are presumed to ascend 15% to CN¥0.92. Previously, the analysts had been modelling revenues of CN¥32b and earnings per share (EPS) of CN¥1.03 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a real cut to earnings per share numbers as well.

View our latest analysis for Zhejiang Sanhua Intelligent ControlsLtd

It'll come as no surprise then, to learn that the analysts have cut their price target 5.7% to CN¥30.00.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zhejiang Sanhua Intelligent ControlsLtd's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Zhejiang Sanhua Intelligent ControlsLtd'shistorical trends, as the 17% annualised revenue growth to the end of 2024 is roughly in line with the 20% 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. It's clear that while Zhejiang Sanhua Intelligent ControlsLtd's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. 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. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Zhejiang Sanhua Intelligent ControlsLtd.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Zhejiang Sanhua Intelligent ControlsLtd going out to 2026, and you can see them free on our platform here.

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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.