The latest analyst coverage could presage a bad day for Fu Shou Yuan International Group Limited (HKG:1448), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.
Following the downgrade, the consensus from five analysts covering Fu Shou Yuan International Group is for revenues of CN¥1.9b in 2025, implying an uncomfortable 11% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CN¥2.4b in 2025. The consensus view seems to have become more pessimistic on Fu Shou Yuan International Group, noting the sizeable cut to revenue estimates in this update.
See our latest analysis for Fu Shou Yuan International Group
Notably, the analysts have cut their price target 8.7% to CN¥4.15, suggesting concerns around Fu Shou Yuan International Group's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Fu Shou Yuan International Group at CN¥4.37 per share, while the most bearish prices it at CN¥3.92. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 11% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 5.7% 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 - Fu Shou Yuan International Group is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Fu Shou Yuan International Group's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Fu Shou Yuan International Group going forwards.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Fu Shou Yuan International Group, including its declining profit margins. Learn more, and discover the 1 other risk we've identified, for 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.