Time To Worry? Analysts Are Downgrading Their Suzhou Weizhixiang Food Co., Ltd. (SHSE:605089) Outlook

The analysts covering Suzhou Weizhixiang Food Co., Ltd. (SHSE:605089) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the latest downgrade, the four analysts covering Suzhou Weizhixiang Food provided consensus estimates of CN¥645m revenue in 2024, which would reflect an uneasy 9.1% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to descend 13% to CN¥0.65 in the same period. Prior to this update, the analysts had been forecasting revenues of CN¥802m and earnings per share (EPS) of CN¥1.09 in 2024. Indeed, we can see that the analysts are a lot more bearish about Suzhou Weizhixiang Food's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Suzhou Weizhixiang Food

The consensus price target fell 30% to CN¥22.54, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 17% by the end of 2024. This indicates a significant reduction from annual growth of 1.4% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 11% annually for the foreseeable future. It's pretty clear that Suzhou Weizhixiang Food's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Suzhou Weizhixiang Food. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Suzhou Weizhixiang Food's revenues are expected to grow slower than 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 Suzhou Weizhixiang Food.

Worse yet, our risk analysis suggests that Suzhou Weizhixiang Food may find it hard to maintain its dividend following these downgrades. For more information, you can click here to learn more about our dividend analysis and the 1 potential flag we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.