Rainbows and Unicorns: OFILM Group Co., Ltd. (SZSE:002456) Analysts Just Became A Lot More Optimistic

Shareholders in OFILM Group Co., Ltd. (SZSE:002456) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The stock price has risen 4.6% to CN¥8.04 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

After the upgrade, the three analysts covering OFILM Group are now predicting revenues of CN¥22b in 2024. If met, this would reflect a decent 19% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 45% to CN¥0.20. Previously, the analysts had been modelling revenues of CN¥19b and earnings per share (EPS) of CN¥0.13 in 2024. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

View our latest analysis for OFILM Group

Despite these upgrades, the consensus price target fell 12% to CN¥8.18, perhaps signalling that the uplift in performance is not expected to last.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that OFILM Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 26% annualised growth until the end of 2024. If achieved, this would be a much better result than the 29% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 18% annually. So it looks like OFILM Group is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. A lower price target is not intuitively what we would expect from a company whose business prospects are improving - at least judging by these forecasts - but if the underlying fundamentals are strong, OFILM Group could be one for the watch list.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple OFILM Group 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.

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