These Analysts Just Made A Massive Downgrade To Their Gemdale Corporation (SHSE:600383) EPS Forecasts

Market forces rained on the parade of Gemdale Corporation (SHSE:600383) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the consensus from nine analysts covering Gemdale is for revenues of CN¥79b in 2024, implying an uneasy 20% decline in sales compared to the last 12 months. Statutory earnings per share are forecast to be CN¥0.20, approximately in line with the last 12 months. Prior to this update, the analysts had been forecasting revenues of CN¥98b and earnings per share (EPS) of CN¥1.31 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

See our latest analysis for Gemdale

It'll come as no surprise then, to learn that the analysts have cut their price target 17% to CN¥4.22.

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. We would highlight that sales are expected to reverse, with a forecast 20% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.4% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Gemdale is expected to lag 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 Gemdale. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Gemdale.

There might be good reason for analyst bearishness towards Gemdale, like its declining profit margins. For more information, you can click here to discover this and the 1 other risk we've identified.

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.