It's been a good week for Zhejiang JIULI Hi-tech Metals Co.,Ltd (SZSE:002318) shareholders, because the company has just released its latest first-quarter results, and the shares gained 8.8% to CN¥24.97. Revenue of CN¥2.4b beat expectations by an impressive 21%, while statutory earnings per share (EPS) were CN¥1.53, in line with estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, Zhejiang JIULI Hi-tech MetalsLtd's six analysts currently expect revenues in 2024 to be CN¥9.25b, approximately in line with the last 12 months. Statutory earnings per share are forecast to dip 9.0% to CN¥1.50 in the same period. Before this earnings report, the analysts had been forecasting revenues of CN¥8.96b and earnings per share (EPS) of CN¥1.49 in 2024. There doesn't appear to have been a major change in sentiment following the results, other than the slight bump in revenue estimates.
Even though revenue forecasts increased, there was no change to the consensus price target of CN¥27.92, suggesting the analysts are focused on earnings as the driver of value creation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Zhejiang JIULI Hi-tech MetalsLtd analyst has a price target of CN¥30.00 per share, while the most pessimistic values it at CN¥25.84. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Zhejiang JIULI Hi-tech MetalsLtd is an easy business to forecast or the the analysts are all using similar assumptions.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.3% by the end of 2024. This indicates a significant reduction from annual growth of 16% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 10% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Zhejiang JIULI Hi-tech MetalsLtd is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at CN¥27.92, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Zhejiang JIULI Hi-tech MetalsLtd going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Zhejiang JIULI Hi-tech MetalsLtd you should be aware of.
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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.