Some Nanofilm Technologies International Limited (SGX:MZH) Analysts Just Made A Major Cut To Next Year's Estimates

The analysts covering Nanofilm Technologies International Limited (SGX:MZH) 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) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the latest consensus from Nanofilm Technologies International's eight analysts is for revenues of S$279m in 2021, which would reflect a huge 28% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to dip 3.6% to S$0.10 in the same period. Before this latest update, the analysts had been forecasting revenues of S$311m and earnings per share (EPS) of S$0.13 in 2021. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

View our latest analysis for Nanofilm Technologies International

It'll come as no surprise then, to learn that the analysts have cut their price target 26% to S$4.63. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Nanofilm Technologies International at S$6.00 per share, while the most bearish prices it at S$4.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. The analysts are definitely expecting Nanofilm Technologies International's growth to accelerate, with the forecast 28% annualised growth to the end of 2021 ranking favourably alongside historical growth of 22% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Nanofilm Technologies International to grow faster than 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 Nanofilm Technologies International. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Nanofilm Technologies International.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Nanofilm Technologies International's financials, such as concerns around earnings quality. Learn more, and discover the 1 other risk we've identified, for 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.
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