Tonghua Dongbao Pharmaceutical Co., Ltd. (SHSE:600867) Analysts Just Slashed This Year's Estimates

Market forces rained on the parade of Tonghua Dongbao Pharmaceutical Co., Ltd. (SHSE:600867) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the latest downgrade, the seven analysts covering Tonghua Dongbao Pharmaceutical provided consensus estimates of CN¥2.1b revenue in 2024, which would reflect a definite 14% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to crater 54% to CN¥0.10 in the same period. Prior to this update, the analysts had been forecasting revenues of CN¥3.1b and earnings per share (EPS) of CN¥0.54 in 2024. Indeed, we can see that the analysts are a lot more bearish about Tonghua Dongbao Pharmaceutical's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Tonghua Dongbao Pharmaceutical

The consensus price target fell 9.8% to CN¥11.37, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. Over the past five years, revenues have declined around 0.05% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 26% decline in revenue until the end of 2024. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 12% annually. So while a broad number of companies are forecast to grow, unfortunately Tonghua Dongbao Pharmaceutical is expected to see its sales affected worse than other companies in 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Tonghua Dongbao Pharmaceutical's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Tonghua Dongbao Pharmaceutical.

There might be good reason for analyst bearishness towards Tonghua Dongbao Pharmaceutical, like the risk of cutting its dividend. Learn more, and discover the 2 other warning signs we've identified, for free on our platform here.

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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.