The latest analyst coverage could portend a bad day for China Traditional Chinese Medicine Holdings Co.Limited (HKG:570), with analysts making across-the-board cuts to their statutory estimates, which may leave shareholders a bit shocked. Both revenue and earnings per share (EPS) forecasts have been lowered as analysts see gray clouds on the horizon. However, investors have been significantly more bullish on China Traditional Chinese Medicine Holdings recently, with the share price rising 16% to HK$4.38 last week. With such a strong increase, it seems that brokers have seen something that is not yet taken into account by the wider market.
Following the latest downgrade, the current consensus, from six analysts covering China Traditional Chinese Medicine Holdings, expects revenue of C$16 billion in 2022, which would reflect a noticeable 6.7% reduction in China’s sales. Traditional Chinese Medicine Holdings over the past 12 years. month. Statutory earnings per share are expected to drop 17% to CN¥0.23 over the same period. Prior to this update, analysts were forecasting revenue of 17 billion Canadian yen and earnings per share (EPS) of 0.28 billion domestic yen in 2022. Indeed, we can see that analysts are much more bearish on to the prospects of China Traditional Chinese Medicine Holdings. , administering a measurable reduction in revenue estimates and lowering their EPS estimates to boot.
Check out our latest analysis for China Traditional Chinese Medicine Holdings
It will therefore come as no surprise to learn that analysts have cut their price target by 9.4% to ¥3.52 CN. There is, however, another way to think about price targets, and that is to look at the range of price targets offered by analysts, as a wide range of estimates could suggest a diverse view of possible outcomes for the market. company. Currently, the most bullish analyst values China Traditional Chinese Medicine Holdings at CN¥5.48 per share, while the most bearish one values it at CN¥2.61. Notice the wide gap between analyst price targets? This implies to us that there is a fairly wide range of possible scenarios for the underlying activity.
Looking now at the big picture, one way to understand these forecasts is to see how they compare to past performance and industry growth estimates. These estimates imply that sales are expected to slow, with annualized revenue expected to fall by 6.7% by the end of 2022. This indicates a significant reduction from the annual growth of 17% over the past five years. Contrast that with our data, which suggests that other companies in the same industry should, overall, see revenue growth of 16% per year. So while its revenue is expected to decline, there is no bright side to this cloud – China Traditional Chinese Medicine Holdings is expected to lag the broader industry.
The most important thing to remember is that analysts have cut their earnings per share estimates, expecting a sharp drop in trading conditions. Unfortunately, they have also lowered their revenue estimates, and the latest forecasts imply that the company will grow sales more slowly than the overall market. Given the scale of the downgrades, it wouldn’t be surprising to see the market become more wary of activity.
That said, the company’s long-term earnings trajectory is much more important than next year. At Simply Wall St, we have a full range of analyst estimates for China Traditional Chinese Medicine Holdings up to 2024, and you can view them for free on our platform here.
Of course, see the management of the company invest large sums of money in a stock can be just as useful as knowing if analysts are lowering their estimates. So you can also search this free list of stocks that insiders buy.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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