COFCO Technology & Industry Co., Ltd. (SZSE:301058) Analysts Just Trimmed Their Revenue Forecasts By 18%

Today is shaping up negative for COFCO Technology & Industry Co., Ltd. (SZSE:301058) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the current consensus from COFCO Technology & Industry's four analysts is for revenues of CN¥3.2b in 2024 which - if met - would reflect a substantial 33% increase on its sales over the past 12 months. Per-share earnings are expected to grow 19% to CN¥0.51. Before this latest update, the analysts had been forecasting revenues of CN¥3.9b and earnings per share (EPS) of CN¥0.56 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a minor downgrade to EPS estimates to boot.

See our latest analysis for COFCO Technology & Industry

It'll come as no surprise then, to learn that the analysts have cut their price target 12% to CN¥12.37.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting COFCO Technology & Industry's growth to accelerate, with the forecast 33% annualised growth to the end of 2024 ranking favourably alongside historical growth of 9.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that COFCO Technology & Industry is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on COFCO Technology & Industry after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for COFCO Technology & Industry going out to 2026, and you can see them 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 that insiders are buying.

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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.