It's shaping up to be a tough period for Jiangsu Shentong Valve Co., Ltd. (SZSE:002438), which a week ago released some disappointing yearly results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 3.3% short of analyst estimates at CN¥2.1b, and statutory earnings of CN¥0.53 per share missed forecasts by 7.1%. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the consensus forecast from Jiangsu Shentong Valve's twin analysts is for revenues of CN¥2.55b in 2024. This reflects a notable 20% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 21% to CN¥0.64. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.67b and earnings per share (EPS) of CN¥0.72 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The analysts made no major changes to their price target of CN¥13.75, suggesting the downgrades are not expected to have a long-term impact on Jiangsu Shentong Valve's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Jiangsu Shentong Valve's growth to accelerate, with the forecast 20% annualised growth to the end of 2024 ranking favourably alongside historical growth of 12% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 17% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Jiangsu Shentong Valve is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Jiangsu Shentong Valve. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Jiangsu Shentong Valve. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Jiangsu Shentong Valve going out as far as 2026, and you can see them free on our platform here.

You can also see whether Jiangsu Shentong Valve is carrying too much debt, and whether its balance sheet is healthy, for free 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.