These Analysts Just Made A Significant Downgrade To Their ShanDongDenghai Seeds Co.,Ltd (SZSE:002041) EPS Forecasts

The analysts covering ShanDongDenghai Seeds Co.,Ltd (SZSE:002041) 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) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. At CN¥8.13, shares are up 6.7% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following this downgrade, ShanDongDenghai SeedsLtd's five analysts are forecasting 2024 revenues to be CN¥1.5b, approximately in line with the last 12 months. Statutory earnings per share are expected to be CN¥0.27, roughly flat on the last 12 months. Before this latest update, the analysts had been forecasting revenues of CN¥1.7b and earnings per share (EPS) of CN¥0.33 in 2024. Indeed, we can see that the analysts are a lot more bearish about ShanDongDenghai SeedsLtd's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for ShanDongDenghai SeedsLtd

The consensus price target fell 21% to CN¥9.51, with the weaker earnings outlook clearly leading analyst valuation estimates.

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 sales are expected to reverse, with a forecast 0.7% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 15% 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. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - ShanDongDenghai SeedsLtd is expected to lag 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, and industry data suggests that ShanDongDenghai SeedsLtd'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 ShanDongDenghai SeedsLtd.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for ShanDongDenghai SeedsLtd 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 backed by insiders.

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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.