Nanjing Iron & Steel Co., Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

It's shaping up to be a tough period for Nanjing Iron & Steel Co., Ltd. (SHSE:600282), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 4.4% short of analyst estimates at CN¥73b, and statutory earnings of CN¥0.34 per share missed forecasts by 9.9%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Nanjing Iron & Steel

Taking into account the latest results, the most recent consensus for Nanjing Iron & Steel from four analysts is for revenues of CN¥77.8b in 2024. If met, it would imply a modest 7.3% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 10% to CN¥0.38. In the lead-up to this report, the analysts had been modelling revenues of CN¥81.7b and earnings per share (EPS) of CN¥0.45 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The average price target climbed 14% to CN¥5.13despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

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 Nanjing Iron & Steel's revenue growth is expected to slow, with the forecast 7.3% annualised growth rate until the end of 2024 being well below the historical 12% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Nanjing Iron & Steel.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Nanjing Iron & Steel. Long-term earnings power is much more important than next year's profits. We have forecasts for Nanjing Iron & Steel going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Nanjing Iron & Steel you should know about.

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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.