The latest analyst coverage could presage a bad day for LONGi Green Energy Technology Co., Ltd. (SHSE:601012), 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 the analysts have soured majorly on the business.
Following the latest downgrade, the 25 analysts covering LONGi Green Energy Technology provided consensus estimates of CN¥116b revenue in 2024, which would reflect a small 2.5% decline on its sales over the past 12 months. Statutory earnings per share are presumed to accumulate 7.0% to CN¥0.67. Previously, the analysts had been modelling revenues of CN¥136b and earnings per share (EPS) of CN¥1.74 in 2024. Indeed, we can see that the analysts are a lot more bearish about LONGi Green Energy Technology's prospects, administering a substantial drop in 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 7.8% to CN¥24.17.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 3.3% by the end of 2024. This indicates a significant reduction from annual growth of 33% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 23% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - LONGi Green Energy Technology is expected to lag 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. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of LONGi Green Energy Technology.
There might be good reason for analyst bearishness towards LONGi Green Energy Technology, like its declining profit margins. Learn more, and discover the 2 other warning signs we've identified, for 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.