Shandong Bailong Chuangyuan Bio-Tech Co., Ltd. (SHSE:605016) Analysts Are More Bearish Than They Used To Be

Today is shaping up negative for Shandong Bailong Chuangyuan Bio-Tech Co., Ltd. (SHSE:605016) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon. The stock price has risen 6.2% to CN¥27.93 over the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the latest consensus from Shandong Bailong Chuangyuan Bio-Tech's three analysts is for revenues of CN¥1.2b in 2024, which would reflect a major 30% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 37% to CN¥1.12. Previously, the analysts had been modelling revenues of CN¥1.4b and earnings per share (EPS) of CN¥1.37 in 2024. Indeed, we can see that the analysts are a lot more bearish about Shandong Bailong Chuangyuan Bio-Tech's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Shandong Bailong Chuangyuan Bio-Tech

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Shandong Bailong Chuangyuan Bio-Tech's growth to accelerate, with the forecast 30% annualised growth to the end of 2024 ranking favourably alongside historical growth of 15% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.2% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shandong Bailong Chuangyuan Bio-Tech to grow faster than the wider 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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Shandong Bailong Chuangyuan Bio-Tech, and their negativity could be grounds for caution.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Shandong Bailong Chuangyuan Bio-Tech analysts - going out to 2026, and you can see them 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.