Shanxi Coking Coal Energy Group Co., Ltd. Just Missed EPS By 9.9%: Here's What Analysts Think Will Happen Next

Shanxi Coking Coal Energy Group Co., Ltd. (SZSE:000983) shareholders are probably feeling a little disappointed, since its shares fell 4.9% to CN¥10.76 in the week after its latest full-year results. Revenues of CN¥56b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CN¥1.23, missing estimates by 9.9%. 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.

See our latest analysis for Shanxi Coking Coal Energy Group

Taking into account the latest results, Shanxi Coking Coal Energy Group's six analysts currently expect revenues in 2024 to be CN¥54.5b, approximately in line with the last 12 months. Per-share earnings are expected to increase 4.2% to CN¥1.24. In the lead-up to this report, the analysts had been modelling revenues of CN¥56.4b and earnings per share (EPS) of CN¥1.55 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

What's most unexpected is that the consensus price target rose 12% to CN¥11.42, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Shanxi Coking Coal Energy Group, with the most bullish analyst valuing it at CN¥13.30 and the most bearish at CN¥9.53 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Shanxi Coking Coal Energy Group shareholders.

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 revenue is expected to reverse, with a forecast 1.9% annualised decline to the end of 2024. That is a notable change from historical growth of 17% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Shanxi Coking Coal Energy Group is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Shanxi Coking Coal Energy Group analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Shanxi Coking Coal Energy Group that you need to be mindful of.

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.