Dekon Food and Agriculture Group (HKG:2419) Analysts Just Cut Their EPS Forecasts Substantially

The analysts covering Dekon Food and Agriculture Group (HKG:2419) 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.

Following the downgrade, the most recent consensus for Dekon Food and Agriculture Group from its twin analysts is for revenues of CN¥25b in 2025 which, if met, would be a decent 11% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to tumble 34% to CN¥6.97 in the same period. Before this latest update, the analysts had been forecasting revenues of CN¥28b and earnings per share (EPS) of CN¥8.11 in 2025. Indeed, we can see that the analysts are a lot more bearish about Dekon Food and Agriculture Group's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Dekon Food and Agriculture Group

It'll come as no surprise then, to learn that the analysts have cut their price target 12% to CN¥43.36. 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. Currently, the most bullish analyst values Dekon Food and Agriculture Group at CN¥47.60 per share, while the most bearish prices it at CN¥39.12. This is a very narrow spread of estimates, implying either that Dekon Food and Agriculture Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. It's pretty clear that there is an expectation that Dekon Food and Agriculture Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.8% per year. Even after the forecast slowdown in growth, it seems obvious that Dekon Food and Agriculture Group is also expected to grow faster than the wider 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. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2027, which can be seen for 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.