Contemporary Amperex Technology Co., Limited (SZSE:300750) Analysts Just Trimmed Their Revenue Forecasts By 16%

The analysts covering Contemporary Amperex Technology Co., Limited (SZSE:300750) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Bidders are definitely seeing a different story, with the stock price of CN¥181 reflecting a 15% rise in the past week. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.

Following the latest downgrade, the current consensus, from the 31 analysts covering Contemporary Amperex Technology, is for revenues of CN¥397b in 2024, which would reflect a noticeable 4.0% reduction in Contemporary Amperex Technology's sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CN¥473b in 2024. The consensus view seems to have become more pessimistic on Contemporary Amperex Technology, noting the substantial drop in revenue estimates in this update.

View our latest analysis for Contemporary Amperex Technology

There was no particular change to the consensus price target of CN¥252, with Contemporary Amperex Technology's latest outlook seemingly not enough to result in a change of valuation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.0% by the end of 2024. This indicates a significant reduction from annual growth of 56% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 19% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Contemporary Amperex Technology is expected to lag the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Contemporary Amperex Technology this year. They also expect company revenue to perform worse than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Contemporary Amperex Technology going forwards.

Still got questions? We have estimates for Contemporary Amperex Technology from its 31 analysts out until 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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