Analysts Just Slashed Their Wuxi Lead Intelligent Equipment CO.,LTD. (SZSE:300450) EPS Numbers

Today is shaping up negative for Wuxi Lead Intelligent Equipment CO.,LTD. (SZSE:300450) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. 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. Surprisingly the share price has been buoyant, rising 32% to CN¥24.43 in the past 7 days. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.

Following the downgrade, the latest consensus from Wuxi Lead Intelligent EquipmentLTD's 13 analysts is for revenues of CN¥16b in 2025, which would reflect a sizeable 25% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 3,570% to CN¥1.40. Before this latest update, the analysts had been forecasting revenues of CN¥18b and earnings per share (EPS) of CN¥1.77 in 2025. Indeed, we can see that the analysts are a lot more bearish about Wuxi Lead Intelligent EquipmentLTD's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Wuxi Lead Intelligent EquipmentLTD

Despite the cuts to forecast earnings, there was no real change to the CN¥21.94 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Wuxi Lead Intelligent EquipmentLTD's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 27% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 17% annually. Factoring in the forecast slowdown in growth, it looks like Wuxi Lead Intelligent EquipmentLTD is forecast to grow at about the same rate as 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 Wuxi Lead Intelligent EquipmentLTD. 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. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected next year, we wouldn't be surprised if investors were a bit wary of Wuxi Lead Intelligent EquipmentLTD.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Wuxi Lead Intelligent EquipmentLTD's business, like the risk of cutting its dividend. Learn more, and discover the 1 other concern we've identified, for 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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