ENN Natural Gas Co.,Ltd. (SHSE:600803) Analysts Just Slashed This Year's Estimates

The analysts covering ENN Natural Gas Co.,Ltd. (SHSE:600803) 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 analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, ENN Natural GasLtd's 13 analysts are now forecasting revenues of CN¥150b in 2024. This would be an okay 4.1% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to shrink 10.0% to CN¥2.07 in the same period. Previously, the analysts had been modelling revenues of CN¥167b and earnings per share (EPS) of CN¥2.34 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.

View our latest analysis for ENN Natural GasLtd

Analysts made no major changes to their price target of CN¥23.18, suggesting the downgrades are not expected to have a long-term impact on ENN Natural GasLtd's valuation.

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. We would highlight that ENN Natural GasLtd's revenue growth is expected to slow, with the forecast 4.1% annualised growth rate until the end of 2024 being well below the historical 24% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than ENN Natural GasLtd.

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 ENN Natural GasLtd. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that ENN Natural GasLtd's revenues are expected to grow slower 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 ENN Natural GasLtd after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for ENN Natural GasLtd 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 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.