Guangdong Electric Power Development Co., Ltd. (SZSE:000539) Analysts Just Cut Their EPS Forecasts Substantially

The latest analyst coverage could presage a bad day for Guangdong Electric Power Development Co., Ltd. (SZSE:000539), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business. At CN¥5.31, shares are up 6.8% in the past 7 days. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

After the downgrade, the consensus from Guangdong Electric Power Development's three analysts is for revenues of CN¥55b in 2024, which would reflect an uneasy 8.6% decline in sales compared to the last year of performance. Per-share earnings are expected to leap 24% to CN¥0.23. Prior to this update, the analysts had been forecasting revenues of CN¥64b and earnings per share (EPS) of CN¥0.62 in 2024. Indeed, we can see that the analysts are a lot more bearish about Guangdong Electric Power Development's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Guangdong Electric Power Development

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 8.6% by the end of 2024. This indicates a significant reduction from annual growth of 19% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.0% annually for the foreseeable future. It's pretty clear that Guangdong Electric Power Development's revenues are expected to perform substantially worse than the wider industry.

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 Guangdong Electric Power Development. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Guangdong Electric Power Development, and we wouldn't blame shareholders for feeling a little more cautious themselves.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Guangdong Electric Power Development analysts - going out to 2026, and you can see them 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.