Downgrade: Here's How Analysts See Shanghai Aiko Solar Energy Co.,Ltd. (SHSE:600732) Performing In The Near Term

The latest analyst coverage could presage a bad day for Shanghai Aiko Solar Energy Co.,Ltd. (SHSE:600732), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon. The stock price has risen 4.7% to CN¥8.07 over the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the downgrade, the most recent consensus for Shanghai Aiko Solar EnergyLtd from its seven analysts is for revenues of CN¥21b in 2024 which, if met, would be a substantial 32% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 72% to CN¥0.36. Prior to this update, the analysts had been forecasting revenues of CN¥27b and earnings per share (EPS) of CN¥0.68 in 2024. So we can see that the consensus has become notably more bearish on Shanghai Aiko Solar EnergyLtd's outlook with these numbers, making a sizeable cut to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

View our latest analysis for Shanghai Aiko Solar EnergyLtd

The consensus price target fell 28% to CN¥13.33, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shanghai Aiko Solar EnergyLtd's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Shanghai Aiko Solar EnergyLtd'shistorical trends, as the 32% annualised revenue growth to the end of 2024 is roughly in line with the 32% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 23% per year. So although Shanghai Aiko Solar EnergyLtd is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts are expecting Shanghai Aiko Solar EnergyLtd to become unprofitable this year. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Shanghai Aiko Solar EnergyLtd.

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 Shanghai Aiko Solar EnergyLtd 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 with high insider ownership.

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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.