The latest analyst coverage could presage a bad day for Jiahe Foods Industry Co., Ltd. (SHSE:605300), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After this downgrade, Jiahe Foods Industry's three analysts are now forecasting revenues of CN¥3.1b in 2024. This would be a satisfactory 7.4% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to shrink 4.6% to CN¥0.61 in the same period. Prior to this update, the analysts had been forecasting revenues of CN¥3.5b and earnings per share (EPS) of CN¥0.84 in 2024. Indeed, we can see that the analysts are a lot more bearish about Jiahe Foods Industry's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

The consensus price target fell 32% to CN¥16.25, with the weaker earnings outlook clearly leading analyst valuation estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Jiahe Foods Industry's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.4% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Jiahe Foods Industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Jiahe Foods Industry. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Jiahe Foods Industry's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Jiahe Foods Industry.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Jiahe Foods Industry analysts - going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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