Analysts Are More Bearish On Jonhon Optronic Technology Co., Ltd. (SZSE:002179) Than They Used To Be

Market forces rained on the parade of Jonhon Optronic Technology Co., Ltd. (SZSE:002179) 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. Shares are up 8.7% to CN¥42.55 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

After the downgrade, the eight analysts covering Jonhon Optronic Technology are now predicting revenues of CN¥26b in 2025. If met, this would reflect a major 24% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 25% to CN¥1.99. Prior to this update, the analysts had been forecasting revenues of CN¥30b and earnings per share (EPS) of CN¥2.26 in 2025. Indeed, we can see that the analysts are a lot more bearish about Jonhon Optronic Technology's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Jonhon Optronic Technology

Despite the cuts to forecast earnings, there was no real change to the CN¥50.30 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

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. The analysts are definitely expecting Jonhon Optronic Technology's growth to accelerate, with the forecast 24% annualised growth to the end of 2025 ranking favourably alongside historical growth of 17% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Jonhon Optronic Technology is expected to grow much faster than its 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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Jonhon Optronic Technology.

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 Jonhon Optronic Technology analysts - 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 backed by insiders.

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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.