The Jiangsu Expressway Company Limited (HKG:177) Analysts Have Been Trimming Their Sales Forecasts

Today is shaping up negative for Jiangsu Expressway Company Limited (HKG:177) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

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Following the latest downgrade, the seven analysts covering Jiangsu Expressway provided consensus estimates of CN¥21b revenue in 2025, which would reflect a considerable 16% decline on its sales over the past 12 months. Per-share earnings are expected to rise 3.7% to CN¥1.01. Prior to this update, the analysts had been forecasting revenues of CN¥26b and earnings per share (EPS) of CN¥1.03 in 2025. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a small dip in earnings per share numbers as well.

See our latest analysis for Jiangsu Expressway

Analysts made no major changes to their price target of CN¥9.64, suggesting the downgrades are not expected to have a long-term impact on Jiangsu Expressway's valuation. 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 Jiangsu Expressway analyst has a price target of CN¥11.12 per share, while the most pessimistic values it at CN¥8.14. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 sales are expected to reverse, with a forecast 21% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 19% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 0.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Jiangsu Expressway is expected to lag 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Jiangsu Expressway after today.

That said, the analysts might have good reason to be negative on Jiangsu Expressway, given its declining profit margins. Learn more, and discover the 2 other warning signs we've identified, for 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.