One thing we could say about the analysts on Jiangxi Copper Company Limited (HKG:358) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. The stock price has risen 5.2% to HK$14.24 over the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.
After this downgrade, Jiangxi Copper's nine analysts are now forecasting revenues of CN¥535b in 2025. This would be a reasonable 3.1% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to plunge 26% to CN¥1.39 in the same period. Previously, the analysts had been modelling revenues of CN¥601b and earnings per share (EPS) of CN¥1.84 in 2025. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.
View our latest analysis for Jiangxi Copper
Despite the cuts to forecast earnings, there was no real change to the CN¥13.82 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Jiangxi Copper at CN¥22.73 per share, while the most bearish prices it at CN¥9.12. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Jiangxi Copper's revenue growth is expected to slow, with the forecast 3.1% annualised growth rate until the end of 2025 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 5.5% 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 Jiangxi Copper.
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 Jiangxi Copper's revenues are expected to grow slower than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Jiangxi Copper after the downgrade.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Jiangxi Copper going out to 2027, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.
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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.