Things Look Grim For China Animal Husbandry Industry Co., Ltd. (SHSE:600195) After Today's Downgrade

The latest analyst coverage could presage a bad day for China Animal Husbandry Industry Co., Ltd. (SHSE:600195), 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.

After the downgrade, the ten analysts covering China Animal Husbandry Industry are now predicting revenues of CN¥6.2b in 2024. If met, this would reflect a solid 14% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 22% to CN¥0.48. Before this latest update, the analysts had been forecasting revenues of CN¥7.0b and earnings per share (EPS) of CN¥0.70 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

See our latest analysis for China Animal Husbandry Industry

It'll come as no surprise then, to learn that the analysts have cut their price target 17% to CN¥11.45.

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. It's clear from the latest estimates that China Animal Husbandry Industry's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 7.0% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 14% per year. China Animal Husbandry Industry is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of China Animal Husbandry Industry.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple China Animal Husbandry Industry 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.

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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.