China Film Co., Ltd. (SHSE:600977) Analysts Are More Bearish Than They Used To Be

The latest analyst coverage could presage a bad day for China Film Co., Ltd. (SHSE:600977), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the latest downgrade, China Film's five analysts currently expect revenues in 2024 to be CN¥4.6b, approximately in line with the last 12 months. Per-share earnings are expected to surge 423% to CN¥0.30. Prior to this update, the analysts had been forecasting revenues of CN¥6.3b and earnings per share (EPS) of CN¥0.54 in 2024. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a pretty serious decline to earnings per share numbers as well.

View our latest analysis for China Film

Analysts made no major changes to their price target of CN¥11.08, suggesting the downgrades are not expected to have a long-term impact on China Film's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. From these estimates it looks as though the analysts expect the years of declining sales to come to an end, given the flat revenue forecast out to 2024. That would be a definite improvement, given that the past five years have seen sales shrink 13% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 14% annually. So it's pretty clear that, although revenues are improving, China Film is still expected to grow slower than the 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 China Film.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for China Film 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.