Dajin Heavy Industry Co.,Ltd. (SZSE:002487) Analysts Just Cut Their EPS Forecasts Substantially

The latest analyst coverage could presage a bad day for Dajin Heavy Industry Co.,Ltd. (SZSE:002487), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. 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. Bidders are definitely seeing a different story, with the stock price of CN¥21.03 reflecting a 10% rise in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

Following the downgrade, the most recent consensus for Dajin Heavy IndustryLtd from its four analysts is for revenues of CN¥6.2b in 2024 which, if met, would be a huge 58% increase on its sales over the past 12 months. Per-share earnings are expected to jump 82% to CN¥1.15. Previously, the analysts had been modelling revenues of CN¥8.8b and earnings per share (EPS) of CN¥1.65 in 2024. Indeed, we can see that the analysts are a lot more bearish about Dajin Heavy IndustryLtd's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Dajin Heavy IndustryLtd

The consensus price target fell 21% to CN¥20.80, with the weaker earnings outlook clearly leading analyst valuation estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Dajin Heavy IndustryLtd's growth to accelerate, with the forecast 58% annualised growth to the end of 2024 ranking favourably alongside historical growth of 23% 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. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Dajin Heavy IndustryLtd to grow faster than the wider industry.

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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to 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 Dajin Heavy IndustryLtd.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Dajin Heavy IndustryLtd 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.