As you might know, Zhe Jiang Li Zi Yuan Food Co.,Ltd. (SHSE:605337) last week released its latest yearly, and things did not turn out so great for shareholders. Zhe Jiang Li Zi Yuan FoodLtd missed earnings this time around, with CN¥1.4b revenue coming in 5.3% below what the analysts had modelled. Statutory earnings per share (EPS) of CN¥0.58 also fell short of expectations by 16%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 Zhe Jiang Li Zi Yuan FoodLtd's eight analysts is for revenues of CN¥1.63b in 2024. This reflects a decent 15% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 17% to CN¥0.70. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.74b and earnings per share (EPS) of CN¥0.81 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.
The consensus price target fell 11% to CN¥16.50, 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. There are some variant perceptions on Zhe Jiang Li Zi Yuan FoodLtd, with the most bullish analyst valuing it at CN¥17.00 and the most bearish at CN¥16.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Zhe Jiang Li Zi Yuan FoodLtd's growth to accelerate, with the forecast 15% annualised growth to the end of 2024 ranking favourably alongside historical growth of 11% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 13% per year. Zhe Jiang Li Zi Yuan FoodLtd is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Zhe Jiang Li Zi Yuan FoodLtd. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Zhe Jiang Li Zi Yuan FoodLtd going out to 2026, and you can see them free on our platform here..
You still need to take note of risks, for example - Zhe Jiang Li Zi Yuan FoodLtd has 1 warning sign we think you should be aware of.
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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.