Analysts Just Made A Neat Upgrade To Their Chengdu RML Technology Co., Ltd. (SZSE:301050) Forecasts

Shareholders in Chengdu RML Technology Co., Ltd. (SZSE:301050) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The stock price has risen 6.1% to CN¥58.60 over the past week, suggesting investors are becoming more optimistic. Could this big upgrade push the stock even higher?

After the upgrade, the consensus from Chengdu RML Technology's two analysts is for revenues of CN¥1.3b in 2024, which would reflect a perceptible 6.1% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to dip 8.5% to CN¥1.58 in the same period. Prior to this update, the analysts had been forecasting revenues of CN¥1.1b and earnings per share (EPS) of CN¥1.35 in 2024. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for Chengdu RML Technology

With these upgrades, we're not surprised to see that the analysts have lifted their price target 63% to CN¥70.00 per share.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Chengdu RML Technology's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 6.1% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 23% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 25% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Chengdu RML Technology is expected to lag the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Chengdu RML Technology could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. 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.

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.