Lier Chemical Co.,LTD. Just Missed Earnings - But Analysts Have Updated Their Models

Lier Chemical Co.,LTD. (SZSE:002258) shareholders are probably feeling a little disappointed, since its shares fell 7.0% to CN¥9.07 in the week after its latest annual results. Revenues were in line with forecasts, at CN¥7.9b, although statutory earnings per share came in 20% below what the analysts expected, at CN¥0.75 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Lier ChemicalLTD after the latest results.

Check out our latest analysis for Lier ChemicalLTD

Taking into account the latest results, the consensus forecast from Lier ChemicalLTD's five analysts is for revenues of CN¥8.93b in 2024. This reflects a decent 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 22% to CN¥0.92. Before this earnings report, the analysts had been forecasting revenues of CN¥9.39b and earnings per share (EPS) of CN¥1.42 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

The consensus price target fell 7.1% to CN¥13.00, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic Lier ChemicalLTD analyst has a price target of CN¥14.00 per share, while the most pessimistic values it at CN¥12.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company 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 Lier ChemicalLTD's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2024 being well below the historical 21% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 17% annually. Factoring in the forecast slowdown in growth, it seems obvious that Lier ChemicalLTD is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Lier ChemicalLTD. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Lier ChemicalLTD's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Lier ChemicalLTD going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Lier ChemicalLTD you should know about.

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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.