Analysts Are More Bearish On Wuhan Keqian Biology Co.,Ltd (SHSE:688526) Than They Used To Be

The latest analyst coverage could presage a bad day for Wuhan Keqian Biology Co.,Ltd (SHSE:688526), 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) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. Investors however, have been notably more optimistic about Wuhan Keqian BiologyLtd recently, with the stock price up a noteworthy 14% to CN¥19.84 in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

Following the downgrade, the most recent consensus for Wuhan Keqian BiologyLtd from its seven analysts is for revenues of CN¥1.3b in 2024 which, if met, would be a huge 23% increase on its sales over the past 12 months. Per-share earnings are expected to jump 50% to CN¥1.27. Prior to this update, the analysts had been forecasting revenues of CN¥1.5b and earnings per share (EPS) of CN¥1.45 in 2024. Indeed, we can see that the analysts are a lot more bearish about Wuhan Keqian BiologyLtd's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Wuhan Keqian BiologyLtd

It'll come as no surprise then, to learn that the analysts have cut their price target 18% to CN¥24.75.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Wuhan Keqian BiologyLtd's rate of growth is expected to accelerate meaningfully, with the forecast 23% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 13% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Wuhan Keqian BiologyLtd to grow faster than 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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Wuhan Keqian BiologyLtd.

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 Wuhan Keqian BiologyLtd analysts - 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 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.