Jiangsu Yangnong Chemical Co., Ltd. Just Missed Revenue By 10%: Here's What Analysts Think Will Happen Next

Jiangsu Yangnong Chemical Co., Ltd. (SHSE:600486) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were CN¥11b, 10% below analyst expectations, although losses didn't appear to worsen significantly, with a statutory per-share loss of CN¥3.87 being in line with what the analysts anticipated. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Jiangsu Yangnong Chemical

Taking into account the latest results, the most recent consensus for Jiangsu Yangnong Chemical from twelve analysts is for revenues of CN¥15.1b in 2024. If met, it would imply a sizeable 31% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 14% to CN¥4.39. In the lead-up to this report, the analysts had been modelling revenues of CN¥15.9b and earnings per share (EPS) of CN¥4.51 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the CN¥86.79 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Jiangsu Yangnong Chemical analyst has a price target of CN¥108 per share, while the most pessimistic values it at CN¥70.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 Jiangsu Yangnong Chemical's growth to accelerate, with the forecast 31% annualised growth to the end of 2024 ranking favourably alongside historical growth of 11% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 17% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Jiangsu Yangnong Chemical to grow faster than the wider industry.

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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Jiangsu Yangnong Chemical going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Jiangsu Yangnong Chemical that you should be aware of.

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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.