Changzhou Fusion New Material Co., Ltd. (SHSE:688503) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.
After this upgrade, Changzhou Fusion New Material's five analysts are now forecasting revenues of CN¥15b in 2024. This would be a substantial 41% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 146% to CN¥4.44. Before this latest update, the analysts had been forecasting revenues of CN¥13b and earnings per share (EPS) of CN¥4.26 in 2024. The most recent forecasts are noticeably more optimistic, with a nice increase in revenue estimates and a lift to earnings per share as well.
As a result, it might be a surprise to see that the analysts have cut their price target 18% to CN¥73.00, which could suggest the forecast improvement in performance is not expected to last.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Changzhou Fusion New Material'shistorical trends, as the 41% annualised revenue growth to the end of 2024 is roughly in line with the 37% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 23% per year. So it's pretty clear that Changzhou Fusion New Material is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Changzhou Fusion New Material's future valuation. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Changzhou Fusion New Material.
Analysts are definitely bullish on Changzhou Fusion New Material, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including dilutive stock issuance over the past year. You can learn more, and discover the 2 other warning signs we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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.