Earnings Miss: Juewei Food Co., Ltd. Missed EPS By 32% And Analysts Are Revising Their Forecasts

Juewei Food Co., Ltd. (SHSE:603517) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥1.6b missed by 10%, and statutory earnings per share of CN¥0.21 fell short of forecasts by 32%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Juewei Food after the latest results.

Check out our latest analysis for Juewei Food

After the latest results, the consensus from Juewei Food's 13 analysts is for revenues of CN¥6.70b in 2024, which would reflect a perceptible 2.9% decline in revenue compared to the last year of performance. Statutory earnings per share are predicted to soar 53% to CN¥0.98. Before this earnings report, the analysts had been forecasting revenues of CN¥7.58b and earnings per share (EPS) of CN¥1.13 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a real cut to earnings per share numbers as well.

The consensus price target fell 13% to CN¥18.51, with the weaker earnings outlook clearly leading valuation estimates. 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. Currently, the most bullish analyst values Juewei Food at CN¥29.40 per share, while the most bearish prices it at CN¥10.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 5.8% annualised decline to the end of 2024. That is a notable change from historical growth of 8.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% per year. It's pretty clear that Juewei Food's revenues are expected to perform substantially worse than 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 Juewei Food. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Juewei Food's future valuation.

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. We have estimates - from multiple Juewei Food 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 1 warning sign for Juewei Food that you need to be mindful of.

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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.