Henan Shenhuo Coal Industary and Electricity Power Corporation Limited (SZSE:000933) Analysts Are Cutting Their Estimates: Here's What You Need To Know

Henan Shenhuo Coal Industary and Electricity Power Corporation Limited (SZSE:000933) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥38b, statutory earnings beat expectations 4.9%, with Henan Shenhuo Coal Industary and Electricity Power reporting profits of CN¥2.64 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Henan Shenhuo Coal Industary and Electricity Power

Taking into account the latest results, the most recent consensus for Henan Shenhuo Coal Industary and Electricity Power from nine analysts is for revenues of CN¥39.3b in 2024. If met, it would imply a modest 4.4% increase on its revenue over the past 12 months. Statutory per share are forecast to be CN¥2.67, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of CN¥42.1b and earnings per share (EPS) of CN¥2.98 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The average price target climbed 338% to CN¥23.60despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Henan Shenhuo Coal Industary and Electricity Power, with the most bullish analyst valuing it at CN¥24.00 and the most bearish at CN¥23.20 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. We would highlight that Henan Shenhuo Coal Industary and Electricity Power's revenue growth is expected to slow, with the forecast 4.4% annualised growth rate until the end of 2024 being well below the historical 22% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it seems obvious that Henan Shenhuo Coal Industary and Electricity Power is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Henan Shenhuo Coal Industary and Electricity Power going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Henan Shenhuo Coal Industary and Electricity Power that we have uncovered.

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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.