Runjian Co., Ltd. (SZSE:002929) Analysts Just Slashed This Year's Estimates

The latest analyst coverage could presage a bad day for Runjian Co., Ltd. (SZSE:002929), 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.

Following the downgrade, the latest consensus from Runjian's three analysts is for revenues of CN¥9.4b in 2024, which would reflect a solid 8.1% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to grow 15% to CN¥1.61. Prior to this update, the analysts had been forecasting revenues of CN¥11b and earnings per share (EPS) of CN¥2.25 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

See our latest analysis for Runjian

It'll come as no surprise then, to learn that the analysts have cut their price target 36% to CN¥32.00.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Runjian's revenue growth is expected to slow, with the forecast 8.1% annualised growth rate until the end of 2024 being well below the historical 22% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. Factoring in the forecast slowdown in growth, it seems obvious that Runjian is also expected to grow slower than other industry participants.

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 Runjian. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Runjian's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Runjian.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Runjian 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 with high insider ownership.

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