Time To Worry? Analysts Are Downgrading Their Tianqi Lithium Corporation (SZSE:002466) Outlook

The latest analyst coverage could presage a bad day for Tianqi Lithium Corporation (SZSE:002466), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the consensus from 20 analysts covering Tianqi Lithium is for revenues of CN¥16b in 2024, implying a stressful 60% decline in sales compared to the last 12 months. Statutory earnings per share are supposed to dive 37% to CN¥2.79 in the same period. Previously, the analysts had been modelling revenues of CN¥19b and earnings per share (EPS) of CN¥3.70 in 2024. Indeed, we can see that the analysts are a lot more bearish about Tianqi Lithium's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Tianqi Lithium

It'll come as no surprise then, to learn that the analysts have cut their price target 6.5% to CN¥50.50.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 60% by the end of 2024. This indicates a significant reduction from annual growth of 57% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 16% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Tianqi Lithium is expected to lag the wider 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 Tianqi Lithium. 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.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Tianqi Lithium analysts - going out to 2026, and you can see them 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 that insiders are buying.

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.