Guangxi Fenglin Wood Industry Group Co.,Ltd Just Missed EPS By 55%: Here's What Analysts Think Will Happen Next

The analyst might have been a bit too bullish on Guangxi Fenglin Wood Industry Group Co.,Ltd (SHSE:601996), given that the company fell short of expectations when it released its full-year results last week. Results showed a clear earnings miss, with CN¥2.3b revenue coming in 8.3% lower than what the analystexpected. Statutory earnings per share (EPS) of CN¥0.05 missed the mark badly, arriving some 55% below what was expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Guangxi Fenglin Wood Industry GroupLtd

Following the latest results, Guangxi Fenglin Wood Industry GroupLtd's single analyst are now forecasting revenues of CN¥2.64b in 2024. This would be a notable 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 72% to CN¥0.08. Yet prior to the latest earnings, the analyst had been anticipated revenues of CN¥2.96b and earnings per share (EPS) of CN¥0.14 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a large cut to earnings per share numbers as well.

The consensus price target fell 12% to CN¥3.04, with the weaker earnings outlook clearly leading 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. It's clear from the latest estimates that Guangxi Fenglin Wood Industry GroupLtd's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 6.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Guangxi Fenglin Wood Industry GroupLtd is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Guangxi Fenglin Wood Industry GroupLtd's future valuation.

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. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Guangxi Fenglin Wood Industry GroupLtd 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.