Analysts Just Shaved Their Zhejiang Xinan Chemical Industrial Group Co.,Ltd (SHSE:600596) Forecasts Dramatically

Today is shaping up negative for Zhejiang Xinan Chemical Industrial Group Co.,Ltd (SHSE:600596) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the current consensus from Zhejiang Xinan Chemical Industrial GroupLtd's two analysts is for revenues of CN¥16b in 2024 which - if met - would reflect a meaningful 9.3% increase on its sales over the past 12 months. Per-share earnings are expected to bounce 259% to CN¥0.39. Before this latest update, the analysts had been forecasting revenues of CN¥18b and earnings per share (EPS) of CN¥0.52 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for Zhejiang Xinan Chemical Industrial GroupLtd

The consensus price target fell 10.0% to CN¥9.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. We can infer from the latest estimates that forecasts expect a continuation of Zhejiang Xinan Chemical Industrial GroupLtd'shistorical trends, as the 9.3% annualised revenue growth to the end of 2024 is roughly in line with the 11% annual revenue growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 15% annually. So it's pretty clear that Zhejiang Xinan Chemical Industrial GroupLtd is expected to grow slower than similar companies in the same industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Zhejiang Xinan Chemical Industrial GroupLtd. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Zhejiang Xinan Chemical Industrial GroupLtd's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Zhejiang Xinan Chemical Industrial GroupLtd.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Zhejiang Xinan Chemical Industrial GroupLtd going out as far as 2026, and you can see them free on our 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.