As you might know, China Animal Husbandry Industry Co., Ltd. (SHSE:600195) last week released its latest full-year, and things did not turn out so great for shareholders. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥5.4b missed by 13%, and statutory earnings per share of CN¥0.39 fell short of forecasts by 31%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, China Animal Husbandry Industry's ten analysts are now forecasting revenues of CN¥6.64b in 2024. This would be a sizeable 23% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 29% to CN¥0.51. In the lead-up to this report, the analysts had been modelling revenues of CN¥7.02b and earnings per share (EPS) of CN¥0.70 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.
The consensus price target fell 13% to CN¥11.98, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values China Animal Husbandry Industry at CN¥14.00 per share, while the most bearish prices it at CN¥9.60. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. The analysts are definitely expecting China Animal Husbandry Industry's growth to accelerate, with the forecast 23% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that China Animal Husbandry Industry is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of China Animal Husbandry Industry's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for China Animal Husbandry Industry going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with China Animal Husbandry Industry , and understanding this should be part of your investment process.
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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.