One thing we could say about the analysts on Sinotruk Jinan Truck Co., Ltd. (SZSE:000951) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business. Shares are up 5.7% to CN¥13.90 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

After the downgrade, the consensus from Sinotruk Jinan Truck's three analysts is for revenues of CN¥39b in 2022, which would reflect a definite 9.5% decline in sales compared to the last year of performance. Per-share earnings are expected to surge 31% to CN¥0.62. Before this latest update, the analysts had been forecasting revenues of CN¥46b and earnings per share (EPS) of CN¥0.78 in 2022. Indeed, we can see that the analysts are a lot more bearish about Sinotruk Jinan Truck's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Sinotruk Jinan Truck

Analysts made no major changes to their price target of CN¥12.95, suggesting the downgrades are not expected to have a long-term impact on Sinotruk Jinan Truck's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Sinotruk Jinan Truck, with the most bullish analyst valuing it at CN¥15.00 and the most bearish at CN¥10.90 per share. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 12% by the end of 2022. This indicates a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 19% annually for the foreseeable future. It's pretty clear that Sinotruk Jinan Truck's revenues are expected to perform substantially worse 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 Sinotruk Jinan Truck. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Sinotruk Jinan Truck's revenues are expected to grow slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Sinotruk Jinan Truck.

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 Sinotruk Jinan Truck analysts - going out to 2024, 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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