These Analysts Just Made An Incredible Downgrade To Their Jiangsu TongLin Electric Co.,Ltd. (SZSE:301168) EPS Forecasts

Market forces rained on the parade of Jiangsu TongLin Electric Co.,Ltd. (SZSE:301168) shareholders today, when the analysts downgraded their forecasts for this year. 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.

Following the downgrade, the current consensus from Jiangsu TongLin ElectricLtd's four analysts is for revenues of CN¥2.0b in 2024 which - if met - would reflect a sizeable 27% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 32% to CN¥1.81. Previously, the analysts had been modelling revenues of CN¥2.7b and earnings per share (EPS) of CN¥2.69 in 2024. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

See our latest analysis for Jiangsu TongLin ElectricLtd

It'll come as no surprise then, to learn that the analysts have cut their price target 29% to CN¥40.00.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Jiangsu TongLin ElectricLtd's past performance and to peers in the same industry. It's clear from the latest estimates that Jiangsu TongLin ElectricLtd's rate of growth is expected to accelerate meaningfully, with the forecast 27% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 13% p.a. 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 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Jiangsu TongLin ElectricLtd is expected to grow much faster than its 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 Jiangsu TongLin ElectricLtd. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Jiangsu TongLin ElectricLtd analysts - going out to 2025, 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.

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.