Analyst Forecasts Just Became More Bearish On Shanghai Flyco Electrical Appliance Co., Ltd. (SHSE:603868)

One thing we could say about the analysts on Shanghai Flyco Electrical Appliance Co., Ltd. (SHSE:603868) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Shares are up 9.1% to CN¥50.70 in the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the downgrade, the most recent consensus for Shanghai Flyco Electrical Appliance from its nine analysts is for revenues of CN¥5.7b in 2024 which, if met, would be a solid 12% increase on its sales over the past 12 months. Per-share earnings are expected to climb 16% to CN¥2.71. Prior to this update, the analysts had been forecasting revenues of CN¥6.4b and earnings per share (EPS) of CN¥2.89 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.

Check out our latest analysis for Shanghai Flyco Electrical Appliance

The consensus price target fell 18% to CN¥61.98, 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. The analysts are definitely expecting Shanghai Flyco Electrical Appliance's growth to accelerate, with the forecast 12% annualised growth to the end of 2024 ranking favourably alongside historical growth of 6.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 15% annually. So it's clear that despite the acceleration in growth, Shanghai Flyco Electrical Appliance is expected to grow meaningfully slower than the industry average.

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 Shanghai Flyco Electrical Appliance's revenues are expected to grow slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Shanghai Flyco Electrical Appliance's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Shanghai Flyco Electrical Appliance going forwards.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Shanghai Flyco Electrical Appliance going out to 2026, and you can see them free on our platform here.

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 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.