Things Look Grim For Lier Chemical Co.,LTD. (SZSE:002258) After Today's Downgrade

Market forces rained on the parade of Lier Chemical Co.,LTD. (SZSE:002258) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the five analysts covering Lier ChemicalLTD provided consensus estimates of CN¥7.7b revenue in 2024, which would reflect a discernible 2.1% decline on its sales over the past 12 months. Statutory earnings per share are presumed to jump 21% to CN¥0.92. Before this latest update, the analysts had been forecasting revenues of CN¥9.4b and earnings per share (EPS) of CN¥1.42 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Lier ChemicalLTD

It'll come as no surprise then, to learn that the analysts have cut their price target 7.1% to CN¥13.00.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 2.1% by the end of 2024. This indicates a significant reduction from annual growth of 21% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. It's pretty clear that Lier ChemicalLTD's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Lier ChemicalLTD's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Lier ChemicalLTD.

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 Lier ChemicalLTD 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.