Analysts Just Published A Bright New Outlook For Yankuang Energy Group Company Limited's (HKG:1171)

Celebrations may be in order for Yankuang Energy Group Company Limited (HKG:1171) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. 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.

Following the upgrade, the consensus from nine analysts covering Yankuang Energy Group is for revenues of CN¥149b in 2022, implying a painful 20% decline in sales compared to the last 12 months. Statutory earnings per share are presumed to increase 6.8% to CN¥6.10. Before this latest update, the analysts had been forecasting revenues of CN¥131b and earnings per share (EPS) of CN¥5.40 in 2022. 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 Yankuang Energy Group

It will come as no surprise to learn that the analysts have increased their price target for Yankuang Energy Group 6.7% to CN¥21.42 on the back of these upgrades. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Yankuang Energy Group analyst has a price target of CN¥35.82 per share, while the most pessimistic values it at CN¥14.13. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 37% by the end of 2022. This indicates a significant reduction from annual growth of 3.5% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 3.8% per year. The forecasts do look bearish for Yankuang Energy Group, since they're expecting it to shrink faster than the industry.

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, with sales apparently performing well even though revenue growth expected to decline against the wider market this year. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Yankuang Energy Group could be worth investigating further.

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 Yankuang Energy Group going out to 2024, 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 upgrading 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.