Jiangsu Yangnong Chemical Co., Ltd. (SHSE:600486) Just Missed Earnings: Here's What Analysts Think Will Happen Next

As you might know, Jiangsu Yangnong Chemical Co., Ltd. (SHSE:600486) last week released its latest first-quarter, and things did not turn out so great for shareholders. Jiangsu Yangnong Chemical delivered a grave earnings miss, with both revenues (CN¥3.2b) and statutory earnings per share (CN¥1.06) falling badly short of analyst expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View 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¥13.7b in 2024. If met, it would imply a huge 35% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 22% to CN¥3.73. Before this earnings report, the analysts had been forecasting revenues of CN¥14.5b and earnings per share (EPS) of CN¥4.33 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 consensus price target fell 10% to CN¥77.84, with the weaker earnings outlook clearly leading valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Jiangsu Yangnong Chemical at CN¥92.31 per share, while the most bearish prices it at CN¥64.79. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Jiangsu Yangnong Chemical's rate of growth is expected to accelerate meaningfully, with the forecast 50% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 9.2% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. 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 biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Jiangsu Yangnong Chemical. They also downgraded Jiangsu Yangnong Chemical's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Jiangsu Yangnong Chemical analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Jiangsu Yangnong Chemical that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.