These Analysts Just Made A Notable Downgrade To Their Shanghai Milkground Food Tech Co., Ltd (SHSE:600882) EPS Forecasts

The analysts covering Shanghai Milkground Food Tech Co., Ltd (SHSE:600882) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the latest consensus from Shanghai Milkground Food Tech's nine analysts is for revenues of CN¥4.7b in 2024, which would reflect a notable 16% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 135% to CN¥0.30. Prior to this update, the analysts had been forecasting revenues of CN¥5.3b and earnings per share (EPS) of CN¥0.40 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

See our latest analysis for Shanghai Milkground Food Tech

It'll come as no surprise then, to learn that the analysts have cut their price target 13% to CN¥17.64.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Shanghai Milkground Food Tech's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 16% growth on an annualised basis. This is compared to a historical growth rate of 26% over the past five years. Compare this to the 162 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 13% per year. So it's pretty clear that, while Shanghai Milkground Food Tech's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

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. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Shanghai Milkground Food Tech.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Shanghai Milkground Food Tech analysts - going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.