One thing we could say about the analysts on Hengdian Group DMEGC Magnetics Co. ,Ltd (SZSE:002056) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.
Following the downgrade, the current consensus from Hengdian Group DMEGC Magnetics Ltd's four analysts is for revenues of CN¥22b in 2024 which - if met - would reflect a solid 11% increase on its sales over the past 12 months. Statutory earnings per share are expected to be CN¥1.14, roughly flat on the last 12 months. Before this latest update, the analysts had been forecasting revenues of CN¥29b and earnings per share (EPS) of CN¥1.66 in 2024. Indeed, we can see that the analysts are a lot more bearish about Hengdian Group DMEGC Magnetics Ltd's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hengdian Group DMEGC Magnetics Ltd's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Hengdian Group DMEGC Magnetics Ltd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 29% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 19% per year. Factoring in the forecast slowdown in growth, it seems obvious that Hengdian Group DMEGC Magnetics Ltd is also expected to grow slower than other industry participants.
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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Hengdian Group DMEGC Magnetics Ltd's revenues are expected to grow slower than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Hengdian Group DMEGC Magnetics Ltd, and we wouldn't blame shareholders for feeling a little more cautious themselves.
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 Hengdian Group DMEGC Magnetics Ltd analysts - going out to 2026, 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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