One Shenzhen Institute of Building Research Co., Ltd. (SZSE:300675) Analyst Just Made A Major Cut To Next Year's Estimates

Market forces rained on the parade of Shenzhen Institute of Building Research Co., Ltd. (SZSE:300675) shareholders today, when the covering analyst downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following this downgrade, Shenzhen Institute of Building Research's sole analyst are forecasting 2024 revenues to be CN¥421m, approximately in line with the last 12 months. Per-share earnings are expected to soar 123% to CN¥0.36. Before this latest update, the analyst had been forecasting revenues of CN¥524m and earnings per share (EPS) of CN¥0.48 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for Shenzhen Institute of Building Research

It'll come as no surprise then, to learn that the analyst has cut their price target 21% to CN¥12.85.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shenzhen Institute of Building Research's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Shenzhen Institute of Building Research's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.2% growth on an annualised basis. This is compared to a historical growth rate of 1.8% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Shenzhen Institute of Building Research.

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 Shenzhen Institute of Building Research. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Shenzhen Institute of Building Research's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Shenzhen Institute of Building Research.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Shenzhen Institute of Building Research, including its declining profit margins. For more information, you can click here to discover this and the 2 other flags we've identified.

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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