These Analysts Just Made A Massive Downgrade To Their Shede Spirits Co., Ltd. (SHSE:600702) EPS Forecasts

The latest analyst coverage could presage a bad day for Shede Spirits Co., Ltd. (SHSE:600702), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

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Following the latest downgrade, Shede Spirits' ten analysts currently expect revenues in 2025 to be CN¥5.4b, approximately in line with the last 12 months. Statutory earnings per share are presumed to shoot up 39% to CN¥1.46. Before this latest update, the analysts had been forecasting revenues of CN¥6.1b and earnings per share (EPS) of CN¥3.04 in 2025. Indeed, we can see that the analysts are a lot more bearish about Shede Spirits' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Shede Spirits

Analysts made no major changes to their price target of CN¥68.50, suggesting the downgrades are not expected to have a long-term impact on Shede Spirits' valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shede Spirits' past performance and to peers in the same industry. We would highlight that Shede Spirits' revenue growth is expected to slow, with the forecast 1.3% annualised growth rate until the end of 2025 being well below the historical 20% 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 10% per year. Factoring in the forecast slowdown in growth, it seems obvious that Shede Spirits 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 Shede Spirits' revenues are expected to grow slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Shede Spirits.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Shede Spirits, including concerns around earnings quality. Learn more, and discover the 2 other concerns we've identified, for free on our platform here.

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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.