Huaxin Cement Co., Ltd. (SHSE:600801) Just Reported, And Analysts Assigned A CN¥16.54 Price Target

Investors in Huaxin Cement Co., Ltd. (SHSE:600801) had a good week, as its shares rose 3.8% to close at CN¥13.66 following the release of its yearly results. It was a credible result overall, with revenues of CN¥34b and statutory earnings per share of CN¥1.32 both in line with analyst estimates, showing that Huaxin Cement is executing in line with expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Huaxin Cement after the latest results.

Check out our latest analysis for Huaxin Cement

Taking into account the latest results, the most recent consensus for Huaxin Cement from twelve analysts is for revenues of CN¥36.3b in 2024. If met, it would imply a credible 7.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 14% to CN¥1.51. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥37.9b and earnings per share (EPS) of CN¥1.69 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

The consensus price target fell 5.9% to CN¥16.54, 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 Huaxin Cement at CN¥19.00 per share, while the most bearish prices it at CN¥15.14. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. The analysts are definitely expecting Huaxin Cement's growth to accelerate, with the forecast 7.5% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 9.4% annually. So it's clear that despite the acceleration in growth, Huaxin Cement is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Huaxin Cement. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Huaxin Cement going out to 2026, and you can see them free on our platform here..

Even so, be aware that Huaxin Cement is showing 1 warning sign in our investment analysis , 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.