Tianqi Lithium Corporation (SZSE:002466) Analysts Are Reducing Their Forecasts For This Year

One thing we could say about the analysts on Tianqi Lithium Corporation (SZSE:002466) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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. Shares are up 4.8% to CN¥27.42 in the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the latest downgrade, the 20 analysts covering Tianqi Lithium provided consensus estimates of CN¥12b revenue in 2024, which would reflect a concerning 46% decline on its sales over the past 12 months. Losses are expected to increase slightly, to CN¥2.88 per share. However, before this estimates update, the consensus had been expecting revenues of CN¥13b and CN¥2.48 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

Check out our latest analysis for Tianqi Lithium

The consensus price target fell 14% to CN¥37.46, implicitly signalling that lower earnings per share are a leading indicator for Tianqi Lithium's valuation.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 71% by the end of 2024. This indicates a significant reduction from annual growth of 49% 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 15% annually for the foreseeable future. It's pretty clear that Tianqi Lithium'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 increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Tianqi Lithium's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Tianqi Lithium analysts - 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 with high insider ownership.

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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.