Time To Worry? Analysts Are Downgrading Their Peric Special Gases Co., Ltd. (SHSE:688146) Outlook

Today is shaping up negative for Peric Special Gases Co., Ltd. (SHSE:688146) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After this downgrade, Peric Special Gases' three analysts are now forecasting revenues of CN¥2.0b in 2024. This would be a substantial 22% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 20% to CN¥0.76. Previously, the analysts had been modelling revenues of CN¥2.7b and earnings per share (EPS) of CN¥0.96 in 2024. Indeed, we can see that the analysts are a lot more bearish about Peric Special Gases' prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Peric Special Gases

The consensus price target fell 27% to CN¥33.00, 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. It's clear from the latest estimates that Peric Special Gases' rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 9.8% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Peric Special Gases 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 biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Peric Special Gases. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Peric Special Gases.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Peric Special Gases going out to 2025, and you can see them free on our platform here.

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.

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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.