The latest analyst coverage could presage a bad day for ShanDongDenghai Seeds Co.,Ltd (SZSE:002041), 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. At CN¥9.76, shares are up 4.9% in the past 7 days. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the latest consensus from ShanDongDenghai SeedsLtd's nine analysts is for revenues of CN¥1.6b in 2024, which would reflect an okay 7.1% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 24% to CN¥0.34. Before this latest update, the analysts had been forecasting revenues of CN¥1.8b and earnings per share (EPS) of CN¥0.42 in 2024. Indeed, we can see that the analysts are a lot more bearish about ShanDongDenghai SeedsLtd's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 17% to CN¥13.11.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that ShanDongDenghai SeedsLtd's revenue growth is expected to slow, with the forecast 7.1% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% 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 ShanDongDenghai SeedsLtd.

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 ShanDongDenghai SeedsLtd. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of ShanDongDenghai SeedsLtd.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for ShanDongDenghai SeedsLtd going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.