Guizhou Aviation Technical Development Co., Ltd (SHSE:688239) Analysts Just Trimmed Their Revenue Forecasts By 15%

The analysts covering Guizhou Aviation Technical Development Co., Ltd (SHSE:688239) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. At CN¥28.84, shares are up 5.0% 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.

After the downgrade, the five analysts covering Guizhou Aviation Technical Development are now predicting revenues of CN¥2.2b in 2024. If met, this would reflect a modest 5.1% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 59% to CN¥2.05. Prior to this update, the analysts had been forecasting revenues of CN¥2.6b and earnings per share (EPS) of CN¥2.15 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a minor downgrade to EPS estimates to boot.

Check out our latest analysis for Guizhou Aviation Technical Development

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Guizhou Aviation Technical Development's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Guizhou Aviation Technical Development's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 38% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 21% 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 Guizhou Aviation Technical Development.

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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Guizhou Aviation Technical Development's revenues are expected to grow slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Guizhou Aviation Technical Development after today.

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 Guizhou Aviation Technical Development going out to 2026, and you can see them free on our platform here.

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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.