Last week, you might have seen that Jiangsu Nata Opto-electronic Material Co., Ltd. (SZSE:300346) released its yearly result to the market. The early response was not positive, with shares down 7.9% to CN¥24.24 in the past week. Statutory earnings per share fell badly short of expectations, coming in at CN¥0.39, some 21% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at CN¥1.7b. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from Jiangsu Nata Opto-electronic Material's three analysts is for revenues of CN¥2.05b in 2024. This reflects a substantial 20% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 29% to CN¥0.50. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.09b and earnings per share (EPS) of CN¥0.58 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 92% to CN¥29.00, suggesting the revised estimates are not indicative of a weaker long-term future for the business.
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. We would highlight that Jiangsu Nata Opto-electronic Material's revenue growth is expected to slow, with the forecast 20% annualised growth rate until the end of 2024 being well below the historical 39% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 16% per year. Even after the forecast slowdown in growth, it seems obvious that Jiangsu Nata Opto-electronic Material is also expected to grow faster than the wider 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Jiangsu Nata Opto-electronic Material. Long-term earnings power is much more important than next year's profits. We have forecasts for Jiangsu Nata Opto-electronic Material going out to 2026, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.