The Consensus EPS Estimates For Zhejiang Huayou Cobalt Co., Ltd (SHSE:603799) Just Fell Dramatically

Market forces rained on the parade of Zhejiang Huayou Cobalt Co., Ltd (SHSE:603799) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the nine analysts covering Zhejiang Huayou Cobalt are now predicting revenues of CN¥79b in 2024. If met, this would reflect a sizeable 27% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 62% to CN¥2.73. Before this latest update, the analysts had been forecasting revenues of CN¥96b and earnings per share (EPS) of CN¥3.32 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a considerable drop in earnings per share numbers as well.

See our latest analysis for Zhejiang Huayou Cobalt

The consensus price target fell 14% to CN¥31.27, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zhejiang Huayou Cobalt's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 37% growth on an annualised basis. That is in line with its 33% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.7% per year. So it's pretty clear that Zhejiang Huayou Cobalt is forecast to grow substantially faster than its 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 Huayou Cobalt. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Zhejiang Huayou Cobalt.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Zhejiang Huayou Cobalt's business, like dilutive stock issuance over the past year. Learn more, and discover the 2 other concerns we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.