The analysts covering Joy Kie Corporation Limited (SZSE:300994) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. Shares are up 4.5% to CN¥11.81 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

After this downgrade, Joy Kie's three analysts are now forecasting revenues of CN¥2.4b in 2024. This would be a solid 16% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 36% to CN¥0.67. Previously, the analysts had been modelling revenues of CN¥2.7b and earnings per share (EPS) of CN¥0.82 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a real cut to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 9.9% to CN¥16.00.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Joy Kie's past performance and to peers in the same industry. For example, we noticed that Joy Kie's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 16% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 19% a year over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 16% annually. So it looks like Joy Kie is expected to grow at about the same rate as 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. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Joy Kie.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Joy Kie analysts - going out to 2026, 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.