The perceived health of the Chinese economy has improved greatly in recent months, as many investors are once again bullish on the huge emerging market. Not every stock in the country looks to be able to continue to ride this wave of optimism though, as some bearish clouds are starting to appear for China Petroleum and Chemical Corporation (SNP) in particular.
SNP is one of the largest oil and gas firms in China and the world, with reserves of nearly 2.9 billion barrels of crude oil and 6.7 trillion cubic feet of natural gas. The firm also has an increasingly large overseas operation, in both developed markets as well as in the Near East. Yet despite these recent acquisitions and large reserves, the earnings picture isn’t exactly great for the company.
Full year estimates are pricing in negative earnings growth in the -16% range, though they are also expecting a rebound in the following year. Still, the Most Accurate Estimate and Zacks Earnings ESP for both this year and next are negative, suggesting a broad analyst trend to the downside.
Thanks in part to this, SNP currently has a Zacks Rank of 5 or Strong Sell, a huge change from just a week ago when the stock had a Zacks Rank of 3 or Hold. The firm also receives a Zacks Recommendation of Underperform implying a weak longer term outlook as well.
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