One China Green Electricity Investment of Tianjin Co., Ltd. (SZSE:000537) Analyst Just Cut Their EPS Forecasts

The analyst covering China Green Electricity Investment of Tianjin Co., Ltd. (SZSE:000537) 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) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, China Green Electricity Investment of Tianjin's single analyst is now forecasting revenues of CN¥5.4b in 2024. This would be a major 45% improvement in sales compared to the last 12 months. Per-share earnings are expected to swell 19% to CN¥0.59. Before this latest update, the analyst had been forecasting revenues of CN¥6.5b and earnings per share (EPS) of CN¥0.79 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

View our latest analysis for China Green Electricity Investment of Tianjin

The analyst made no major changes to their price target of CN¥11.80, suggesting the downgrades are not expected to have a long-term impact on China Green Electricity Investment of Tianjin's valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that China Green Electricity Investment of Tianjin is forecast to grow faster in the future than it has in the past, with revenues expected to display 45% annualised growth until the end of 2024. If achieved, this would be a much better result than the 40% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 3.5% per year. Not only are China Green Electricity Investment of Tianjin's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on China Green Electricity Investment of Tianjin after the downgrade.

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 China Green Electricity Investment of Tianjin's business, like concerns around earnings quality. Learn more, and discover the 1 other risk 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.