Brokers

Analyst Estimates: Here’s What Brokers Think Of Sona BLW Precision Forgings Limited (NSE:SONACOMS) After Its Third-Quarter Report

Sona BLW Precision Forgings Limited (NSE:SONACOMS) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Sona BLW Precision Forgings missed revenue estimates by 2.4%, coming in at₹7.8b, although statutory earnings per share (EPS) of ₹2.26 beat expectations, coming in 2.0% ahead of analyst estimates. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Sona BLW Precision Forgings

NSEI:SONACOMS Earnings and Revenue Growth January 26th 2024

Taking into account the latest results, the most recent consensus for Sona BLW Precision Forgings from 15 analysts is for revenues of ₹43.1b in 2025. If met, it would imply a huge 42% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 51% to ₹12.62. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹44.4b and earnings per share (EPS) of ₹12.77 in 2025. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus has reconfirmed its price target of ₹657, showing that the analysts don’t expect weaker revenue expectations next year to have a material impact on Sona BLW Precision Forgings’ market value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. There are some variant perceptions on Sona BLW Precision Forgings, with the most bullish analyst valuing it at ₹794 and the most bearish at ₹505 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Sona BLW Precision Forgings shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Sona BLW Precision Forgings’ growth to accelerate, with the forecast 32% annualised growth to the end of 2025 ranking favourably alongside historical growth of 23% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it’s pretty clear that Sona BLW Precision Forgings is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there’s been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Yet – earnings are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have estimates – from multiple Sona BLW Precision Forgings analysts – going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we’ve spotted with Sona BLW Precision Forgings .

Valuation is complex, but we’re helping make it simple.

Find out whether Sona BLW Precision Forgings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.

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