Earnings Update: Here's Why Analysts Just Lifted Their Shandong Sunpaper Co., Ltd. (SZSE:002078) Price Target To CN¥15.57

It's been a good week for Shandong Sunpaper Co., Ltd. (SZSE:002078) shareholders, because the company has just released its latest annual results, and the shares gained 3.6% to CN¥15.54. It was a credible result overall, with revenues of CN¥40b and statutory earnings per share of CN¥1.10 both in line with analyst estimates, showing that Shandong Sunpaper is executing in line with expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Shandong Sunpaper after the latest results.

Check out our latest analysis for Shandong Sunpaper

Taking into account the latest results, the consensus forecast from Shandong Sunpaper's 15 analysts is for revenues of CN¥44.0b in 2024. This reflects a meaningful 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 20% to CN¥1.32. In the lead-up to this report, the analysts had been modelling revenues of CN¥44.4b and earnings per share (EPS) of CN¥1.27 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 11% to CN¥15.57. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Shandong Sunpaper, with the most bullish analyst valuing it at CN¥18.00 and the most bearish at CN¥10.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Shandong Sunpaper shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shandong Sunpaper's past performance and to peers in the same industry. We would highlight that Shandong Sunpaper's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. Factoring in the forecast slowdown in growth, it looks like Shandong Sunpaper is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Shandong Sunpaper's earnings potential next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Shandong Sunpaper analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Shandong Sunpaper that you need to take into consideration.

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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.