The latest analyst coverage could presage a bad day for Marssenger Kitchenware Co., Ltd. (SZSE:300894), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After this downgrade, Marssenger Kitchenware's ten analysts are now forecasting revenues of CN¥2.2b in 2024. This would be an okay 6.0% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 37% to CN¥0.79. Prior to this update, the analysts had been forecasting revenues of CN¥2.6b and earnings per share (EPS) of CN¥0.96 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a real cut to earnings per share numbers as well.

Despite the cuts to forecast earnings, there was no real change to the CN¥17.65 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Marssenger Kitchenware's growth to accelerate, with the forecast 6.0% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.2% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.6% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Marssenger Kitchenware is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Marssenger Kitchenware after the downgrade.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Marssenger Kitchenware's financials, such as the risk of cutting its dividend. For more information, you can click here to discover this and the 1 other flag we've identified.

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