Analysts Have Been Trimming Their China Coal Xinji Energy Co.,Ltd (SHSE:601918) Price Target After Its Latest Report

Investors in China Coal Xinji Energy Co.,Ltd (SHSE:601918) had a good week, as its shares rose 3.5% to close at CN¥7.14 following the release of its full-year results. China Coal Xinji EnergyLtd reported CN¥13b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CN¥0.92 beat expectations, being 2.8% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the consensus forecast from China Coal Xinji EnergyLtd's seven analysts is for revenues of CN¥13.3b in 2025. This reflects a reasonable 4.6% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be CN¥0.93, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of CN¥13.4b and earnings per share (EPS) of CN¥1.00 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

View our latest analysis for China Coal Xinji EnergyLtd

It might be a surprise to learn that the consensus price target fell 5.6% to CN¥9.44, with the analysts clearly linking lower forecast earnings to the performance of the stock price. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values China Coal Xinji EnergyLtd at CN¥11.00 per share, while the most bearish prices it at CN¥7.88. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that China Coal Xinji EnergyLtd's revenue growth is expected to slow, with the forecast 4.6% annualised growth rate until the end of 2025 being well below the historical 9.3% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.5% annually. Factoring in the forecast slowdown in growth, it looks like China Coal Xinji EnergyLtd is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for China Coal Xinji EnergyLtd. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for China Coal Xinji EnergyLtd going out to 2027, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for China Coal Xinji EnergyLtd you should be aware of, and 1 of them is concerning.

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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.