News Flash: 3 Analysts Think Anhui Guangxin Agrochemical Co., Ltd. (SHSE:603599) Earnings Are Under Threat

One thing we could say about the analysts on Anhui Guangxin Agrochemical Co., Ltd. (SHSE:603599) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from Anhui Guangxin Agrochemical's three analysts is for revenues of CN¥6.9b in 2024 which - if met - would reflect a substantial 33% increase on its sales over the past 12 months. Per-share earnings are expected to jump 34% to CN¥1.69. Previously, the analysts had been modelling revenues of CN¥8.6b and earnings per share (EPS) of CN¥2.33 in 2024. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Anhui Guangxin Agrochemical

Despite the cuts to forecast earnings, there was no real change to the CN¥23.94 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

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. The analysts are definitely expecting Anhui Guangxin Agrochemical's growth to accelerate, with the forecast 33% annualised growth to the end of 2024 ranking favourably alongside historical growth of 22% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Anhui Guangxin Agrochemical is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Anhui Guangxin Agrochemical.

That said, the analysts might have good reason to be negative on Anhui Guangxin Agrochemical, given concerns around earnings quality. For more information, you can click here to discover this and the 1 other concern we've identified.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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.