One China Aviation Oil (Singapore) Corporation Ltd (SGX:G92) Analyst Just Made A Major Cut To Next Year's Estimates

Market forces rained on the parade of China Aviation Oil (Singapore) Corporation Ltd (SGX:G92) shareholders today, when the covering analyst downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following this downgrade, China Aviation Oil (Singapore)'s solitary analyst are forecasting 2023 revenues to be US$13b, approximately in line with the last 12 months. Statutory earnings per share are presumed to soar 36% to US$0.053. Previously, the analyst had been modelling revenues of US$18b and earnings per share (EPS) of US$0.07 in 2023. Indeed, we can see that the analyst is a lot more bearish about China Aviation Oil (Singapore)'s prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for China Aviation Oil (Singapore)

The consensus price target fell 7.3% to US$0.85, with the weaker earnings outlook clearly leading analyst valuation estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2023 compared to the historical decline of 6.3% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 3.5% per year. While China Aviation Oil (Singapore)'s negative revenue trend is expected to moderate, revenues are still expected to shrink next year albeit at a slower rate than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for China Aviation Oil (Singapore). Unfortunately, they also downgraded their revenue estimates, and our data indicates sales are expected to outperform the wider market. Even so, earnings per share are more important to the intrinsic value of the business. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of China Aviation Oil (Singapore).

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for China Aviation Oil (Singapore) going out as far as 2025, 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 downgrading 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.