The analysts covering Contemporary Amperex Technology Co., Limited (SZSE:300750) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Investors however, have been notably more optimistic about Contemporary Amperex Technology recently, with the stock price up a notable 15% to CN¥181 in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.
After the downgrade, the consensus from Contemporary Amperex Technology's 31 analysts is for revenues of CN¥397b in 2024, which would reflect a discernible 4.0% decline in sales compared to the last year of performance. Prior to the latest estimates, the analysts were forecasting revenues of CN¥473b in 2024. The consensus view seems to have become more pessimistic on Contemporary Amperex Technology, noting the measurable cut to revenue estimates in this update.
There was no particular change to the consensus price target of CN¥252, with Contemporary Amperex Technology's latest outlook seemingly not enough to result in a change of valuation.
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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.0% by the end of 2024. This indicates a significant reduction from annual growth of 56% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 19% per year. It's pretty clear that Contemporary Amperex Technology's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Contemporary Amperex Technology going forwards.
Of course, there's always more to the story. We have estimates for Contemporary Amperex Technology from its 31 analysts out until 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.