Downgrade: Here's How This Analyst Sees Shandong Shuangyi Technology Co., Ltd. (SZSE:300690) Performing In The Near Term

The latest analyst coverage could presage a bad day for Shandong Shuangyi Technology Co., Ltd. (SZSE:300690), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

Following the downgrade, the latest consensus from Shandong Shuangyi Technology's lone analyst is for revenues of CN¥947m in 2024, which would reflect a sizeable 25% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 24% to CN¥0.63. Prior to this update, the analyst had been forecasting revenues of CN¥1.2b and earnings per share (EPS) of CN¥0.71 in 2024. Indeed, we can see that the analyst is a lot more bearish about Shandong Shuangyi Technology's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Shandong Shuangyi Technology

What's most unexpected is that the consensus price target rose 47% to CN¥22.00, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

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 analyst is definitely expecting Shandong Shuangyi Technology's growth to accelerate, with the forecast 25% annualised growth to the end of 2024 ranking favourably alongside historical growth of 0.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Shandong Shuangyi Technology is expected to grow much faster than its industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Shandong Shuangyi Technology. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The increasing price target is not intuitively what we would expect to see, given these downgrades, and we'd suggest shareholders revisit their investment thesis before making a decision.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.