Shijiazhuang Yiling Pharmaceutical Co., Ltd. (SZSE:002603) Analysts Just Cut Their EPS Forecasts Substantially

The analysts covering Shijiazhuang Yiling Pharmaceutical Co., Ltd. (SZSE:002603) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After this downgrade, Shijiazhuang Yiling Pharmaceutical's six analysts are now forecasting revenues of CN¥11b in 2024. This would be a sizeable 28% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 244% to CN¥0.93. Before this latest update, the analysts had been forecasting revenues of CN¥13b and earnings per share (EPS) of CN¥1.48 in 2024. Indeed, we can see that the analysts are a lot more bearish about Shijiazhuang Yiling Pharmaceutical's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Shijiazhuang Yiling Pharmaceutical

It'll come as no surprise then, to learn that the analysts have cut their price target 26% to CN¥20.09.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Shijiazhuang Yiling Pharmaceutical's growth to accelerate, with the forecast 28% annualised growth to the end of 2024 ranking favourably alongside historical growth of 16% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shijiazhuang Yiling Pharmaceutical to grow faster than the wider industry.

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 Shijiazhuang Yiling Pharmaceutical. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Shijiazhuang Yiling Pharmaceutical's business, like its declining profit margins. For more information, you can click here to discover this and the 1 other concern 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.