Yongxing Special Materials Technology Co.,Ltd (SZSE:002756) Analysts Just Cut Their EPS Forecasts Substantially

One thing we could say about the analysts on Yongxing Special Materials Technology Co.,Ltd (SZSE:002756) - 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) forecasts went under the knife, suggesting analysts have soured majorly on the business. The stock price has risen 5.1% to CN¥47.58 over the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the latest downgrade, the seven analysts covering Yongxing Special Materials TechnologyLtd provided consensus estimates of CN¥9.8b revenue in 2024, which would reflect a chunky 12% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to crater 34% to CN¥3.62 in the same period. Previously, the analysts had been modelling revenues of CN¥12b and earnings per share (EPS) of CN¥5.78 in 2024. 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 Yongxing Special Materials TechnologyLtd

Analysts made no major changes to their price target of CN¥50.17, suggesting the downgrades are not expected to have a long-term impact on Yongxing Special Materials TechnologyLtd's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 16% by the end of 2024. This indicates a significant reduction from annual growth of 28% 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 11% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Yongxing Special Materials TechnologyLtd is expected to lag 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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 Yongxing Special Materials TechnologyLtd.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Yongxing Special Materials TechnologyLtd's financials, such as concerns around earnings quality. For more information, you can click here to discover this and the 2 other flags we've identified.

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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.