Analysts Just Shaved Their Canvest Environmental Protection Group Company Limited (HKG:1381) Forecasts Dramatically

Market forces rained on the parade of Canvest Environmental Protection Group Company Limited (HKG:1381) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the latest downgrade, the four analysts covering Canvest Environmental Protection Group provided consensus estimates of HK$7.0b revenue in 2023, which would reflect a considerable 15% decline on its sales over the past 12 months. Per-share earnings are expected to swell 17% to HK$0.64. Previously, the analysts had been modelling revenues of HK$8.0b and earnings per share (EPS) of HK$0.75 in 2023. Indeed, we can see that the analysts are a lot more bearish about Canvest Environmental Protection Group's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Canvest Environmental Protection Group

The consensus price target fell 18% to HK$4.86, with the weaker earnings outlook clearly leading analyst valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Canvest Environmental Protection Group analyst has a price target of HK$5.10 per share, while the most pessimistic values it at HK$4.50. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

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. We would highlight that sales are expected to reverse, with a forecast 15% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 25% 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 4.6% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Canvest Environmental Protection Group is expected to lag 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 Canvest Environmental Protection Group. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Canvest Environmental Protection Group's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Canvest Environmental Protection Group.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Canvest Environmental Protection Group going out to 2025, and you can see them 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 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.