Guanghui Energy Co., Ltd. (SHSE:600256) Analysts Are Reducing Their Forecasts For This Year

One thing we could say about the analysts on Guanghui Energy Co., Ltd. (SHSE:600256) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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 Guanghui Energy's five analysts is for revenues of CN¥63b in 2024 which - if met - would reflect a modest 2.3% increase on its sales over the past 12 months. Statutory earnings per share are presumed to rise 6.3% to CN¥0.85. Prior to this update, the analysts had been forecasting revenues of CN¥76b and earnings per share (EPS) of CN¥1.29 in 2024. Indeed, we can see that the analysts are a lot more bearish about Guanghui Energy's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Guanghui Energy

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Guanghui Energy's revenue growth is expected to slow, with the forecast 2.3% annualised growth rate until the end of 2024 being well below the historical 41% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Guanghui Energy.

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 Guanghui Energy's revenues are expected to grow slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Guanghui Energy, and a few readers might choose to steer clear of the stock.

Worse, Guanghui Energy is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. You can learn more about our debt analysis for free on our platform here.

You can also see our analysis of Guanghui Energy's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.