Tayho Advanced Materials Group Co., Ltd. (SZSE:002254) Analysts Are More Bearish Than They Used To Be

Market forces rained on the parade of Tayho Advanced Materials Group Co., Ltd. (SZSE:002254) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the latest consensus from Tayho Advanced Materials Group's dual analysts is for revenues of CN¥4.2b in 2024, which would reflect a modest 7.8% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to swell 19% to CN¥0.33. Previously, the analysts had been modelling revenues of CN¥5.0b and earnings per share (EPS) of CN¥0.43 in 2024. Indeed, we can see that the analysts are a lot more bearish about Tayho Advanced Materials Group's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Tayho Advanced Materials Group

It'll come as no surprise then, to learn that the analysts have cut their price target 36% to CN¥9.00.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Tayho Advanced Materials Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.8% growth on an annualised basis. This is compared to a historical growth rate of 11% 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 13% annually. Factoring in the forecast slowdown in growth, it seems obvious that Tayho Advanced Materials Group is also expected to grow slower than other industry participants.

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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Tayho Advanced Materials Group's revenues are expected to grow slower 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.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Tayho Advanced Materials Group's business, like concerns around earnings quality. Learn more, and discover the 1 other concern we've identified, for 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 with high insider ownership.

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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.