Zhangzhou Pientzehuang Pharmaceutical., Ltd (SHSE:600436) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. Results were good overall, with revenues beating analyst predictions by 3.2% to hit CN¥3.2b. Statutory earnings per share (EPS) came in at CN¥1.62, some 2.2% above whatthe analysts had expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Zhangzhou Pientzehuang Pharmaceutical's ten analysts is for revenues of CN¥11.6b in 2024. This reflects a solid 9.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 13% to CN¥5.63. Before this earnings report, the analysts had been forecasting revenues of CN¥11.7b and earnings per share (EPS) of CN¥5.77 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at CN¥292, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Zhangzhou Pientzehuang Pharmaceutical at CN¥336 per share, while the most bearish prices it at CN¥190. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 13% growth on an annualised basis. That is in line with its 14% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 14% per year. So although Zhangzhou Pientzehuang Pharmaceutical is expected to maintain its revenue growth rate, it's only growing at about the rate of 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at CN¥292, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Zhangzhou Pientzehuang Pharmaceutical. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Zhangzhou Pientzehuang Pharmaceutical 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.