Analysts Just Shaved Their Shandong Humon Smelting Co., Ltd. (SZSE:002237) Forecasts Dramatically

Today is shaping up negative for Shandong Humon Smelting Co., Ltd. (SZSE:002237) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Following the downgrade, the most recent consensus for Shandong Humon Smelting from its dual analysts is for revenues of CN¥93b in 2025 which, if met, would be a major 22% increase on its sales over the past 12 months. Per-share earnings are expected to surge 58% to CN¥0.74. Before this latest update, the analysts had been forecasting revenues of CN¥111b and earnings per share (EPS) of CN¥0.93 in 2025. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Shandong Humon Smelting

Analysts made no major changes to their price target of CN¥11.52, suggesting the downgrades are not expected to have a long-term impact on Shandong Humon Smelting's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shandong Humon Smelting's past performance and to peers in the same industry. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 22% growth on an annualised basis. That is in line with its 20% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 10% annually. So it's pretty clear that Shandong Humon Smelting 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 Shandong Humon Smelting. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better 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 Shandong Humon Smelting.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2027, which can be seen for 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 backed by insiders.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.