Analysts Have Just Cut Their Guangdong Hoshion Industrial Aluminium Co., Ltd. (SZSE:002824) Revenue Estimates By 17%

One thing we could say about the analysts on Guangdong Hoshion Industrial Aluminium Co., Ltd. (SZSE:002824) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Shares are up 4.9% to CN¥15.42 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the downgrade, the latest consensus from Guangdong Hoshion Industrial Aluminium's two analysts is for revenues of CN¥3.2b in 2024, which would reflect a credible 2.4% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 44% to CN¥0.69. Before this latest update, the analysts had been forecasting revenues of CN¥3.8b and earnings per share (EPS) of CN¥0.96 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 Guangdong Hoshion Industrial Aluminium

The consensus price target fell 11% to CN¥15.11, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Guangdong Hoshion Industrial Aluminium's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Guangdong Hoshion Industrial Aluminium's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.4% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% per year. Factoring in the forecast slowdown in growth, it seems obvious that Guangdong Hoshion Industrial Aluminium is also expected to grow slower than other industry participants.

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 Guangdong Hoshion Industrial Aluminium. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on Guangdong Hoshion Industrial Aluminium after today.

There might be good reason for analyst bearishness towards Guangdong Hoshion Industrial Aluminium, like concerns around earnings quality. For more information, you can click here to discover this and the 2 other flags we've identified.

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.