Qinghai Salt Lake Industry Co.,Ltd (SZSE:000792) Analysts Are More Bearish Than They Used To Be

The latest analyst coverage could presage a bad day for Qinghai Salt Lake Industry Co.,Ltd (SZSE:000792), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the current consensus, from the ten analysts covering Qinghai Salt Lake IndustryLtd, is for revenues of CN¥17b in 2024, which would reflect a considerable 20% reduction in Qinghai Salt Lake IndustryLtd's sales over the past 12 months. Per-share earnings are expected to increase 4.7% to CN¥1.54. Prior to this update, the analysts had been forecasting revenues of CN¥21b and earnings per share (EPS) of CN¥1.78 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.

Check out our latest analysis for Qinghai Salt Lake IndustryLtd

Despite the cuts to forecast earnings, there was no real change to the CN¥20.04 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 20% by the end of 2024. This indicates a significant reduction from annual growth of 8.2% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 17% per year. It's pretty clear that Qinghai Salt Lake IndustryLtd's revenues are expected to perform substantially worse than the wider 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 Qinghai Salt Lake IndustryLtd. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Qinghai Salt Lake IndustryLtd's revenues are expected to grow slower 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 Qinghai Salt Lake IndustryLtd.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Qinghai Salt Lake IndustryLtd going out to 2026, and you can see them 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.