Celebrations may be in order for Zhejiang Lante Optics Co., Ltd. (SHSE:688127) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market may be pricing in some blue sky too, with the share price gaining 10% to CN¥20.30 in the last 7 days. It will be interesting to see if today's upgrade is enough to propel the stock even higher.
Following the upgrade, the current consensus from Zhejiang Lante Optics' two analysts is for revenues of CN¥722m in 2023 which - if met - would reflect a major 26% increase on its sales over the past 12 months. Per-share earnings are expected to leap 24% to CN¥0.38. Before this latest update, the analysts had been forecasting revenues of CN¥647m and earnings per share (EPS) of CN¥0.33 in 2023. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.
Check out our latest analysis for Zhejiang Lante Optics
It will come as no surprise to learn that the analysts have increased their price target for Zhejiang Lante Optics 21% to CN¥23.75 on the back of these upgrades.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Zhejiang Lante Optics' growth to accelerate, with the forecast 58% annualised growth to the end of 2023 ranking favourably alongside historical growth of 3.1% 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 grow their revenue at 20% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Zhejiang Lante Optics to grow faster than the wider industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Zhejiang Lante Optics could be worth investigating further.
These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential concern with Zhejiang Lante Optics, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 1 other concern we've identified .
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading 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.