Shandong Jinjing Science & Technology Stock Co.,Ltd Just Missed EPS By 14%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for Shandong Jinjing Science & Technology Stock Co.,Ltd (SHSE:600586), which a week ago released some disappointing yearly results that could have a notable impact on how the market views the stock. Shandong Jinjing Science & Technology StockLtd missed earnings this time around, with CN¥8.0b revenue coming in 4.8% below what the analysts had modelled. Statutory earnings per share (EPS) of CN¥0.33 also fell short of expectations by 14%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Shandong Jinjing Science & Technology StockLtd

After the latest results, the four analysts covering Shandong Jinjing Science & Technology StockLtd are now predicting revenues of CN¥8.27b in 2024. If met, this would reflect a modest 3.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to decrease 9.5% to CN¥0.29 in the same period. Before this earnings report, the analysts had been forecasting revenues of CN¥9.76b and earnings per share (EPS) of CN¥0.57 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 14% to CN¥6.90. 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. The most optimistic Shandong Jinjing Science & Technology StockLtd analyst has a price target of CN¥7.30 per share, while the most pessimistic values it at CN¥6.50. This is a very narrow spread of estimates, implying either that Shandong Jinjing Science & Technology StockLtd is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Shandong Jinjing Science & Technology StockLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.7% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Shandong Jinjing Science & Technology StockLtd is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shandong Jinjing Science & Technology StockLtd. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Shandong Jinjing Science & Technology StockLtd's future valuation.

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

It might also be worth considering whether Shandong Jinjing Science & Technology StockLtd's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.