Guangzhou KDT Machinery Co.,Ltd. (SZSE:002833) Just Reported, And Analysts Assigned A CN¥19.80 Price Target

Shareholders might have noticed that Guangzhou KDT Machinery Co.,Ltd. (SZSE:002833) filed its first-quarter result this time last week. The early response was not positive, with shares down 3.4% to CN¥14.65 in the past week. Revenues came in 2.3% below expectations, at CN¥690m. Statutory earnings per share were relatively better off, with a per-share profit of CN¥1.38 being roughly in line with analyst estimates. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Guangzhou KDT MachineryLtd

Following the latest results, Guangzhou KDT MachineryLtd's solitary analyst are now forecasting revenues of CN¥3.03b in 2024. This would be an okay 6.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 4.6% to CN¥1.44. In the lead-up to this report, the analyst had been modelling revenues of CN¥3.09b and earnings per share (EPS) of CN¥1.62 in 2024. The analyst seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

The average price target fell 25% to CN¥19.80, with reduced earnings forecasts clearly tied to a lower valuation estimate.

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. It's pretty clear that there is an expectation that Guangzhou KDT MachineryLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 9.0% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 16% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Guangzhou KDT MachineryLtd.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Guangzhou KDT MachineryLtd's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Guangzhou KDT MachineryLtd. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Guangzhou KDT MachineryLtd going out as far as 2025, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Guangzhou KDT MachineryLtd .

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.