The analysts covering Guanghui Energy Co., Ltd. (SHSE:600256) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from Guanghui Energy's five analysts is for revenues of CN¥63b in 2024 which - if met - would reflect a reasonable 2.3% increase on its sales over the past 12 months. Statutory earnings per share are presumed to increase 6.3% to CN¥0.85. Previously, the analysts had been modelling revenues of CN¥76b and earnings per share (EPS) of CN¥1.29 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Guanghui Energy's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Guanghui Energy's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.3% growth on an annualised basis. This is compared to a historical growth rate of 41% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.9% annually. Factoring in the forecast slowdown in growth, it seems obvious that Guanghui Energy is also expected to grow slower than other industry participants.

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 Guanghui Energy. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Guanghui Energy, and we wouldn't blame shareholders for feeling a little more cautious themselves.

Worse, Guanghui Energy is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. You can learn more about our debt analysis for free on our platform here.

You can also see our analysis of Guanghui Energy's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.