Downgrade: Here's How Analysts See Asymchem Laboratories (Tianjin) Co., Ltd. (SZSE:002821) Performing In The Near Term

The latest analyst coverage could presage a bad day for Asymchem Laboratories (Tianjin) Co., Ltd. (SZSE:002821), 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.

After the downgrade, the consensus from Asymchem Laboratories (Tianjin)'s 14 analysts is for revenues of CN¥7.1b in 2024, which would reflect a chunky 9.3% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to plummet 34% to CN¥4.13 in the same period. Before this latest update, the analysts had been forecasting revenues of CN¥8.3b and earnings per share (EPS) of CN¥5.92 in 2024. Indeed, we can see that the analysts are a lot more bearish about Asymchem Laboratories (Tianjin)'s prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Asymchem Laboratories (Tianjin)

The consensus price target fell 14% to CN¥132, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. We would highlight that sales are expected to reverse, with a forecast 9.3% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 36% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 15% annually for the foreseeable future. It's pretty clear that Asymchem Laboratories (Tianjin)'s revenues are expected to perform substantially worse 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Asymchem Laboratories (Tianjin) 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.