Eternal Limited Just Missed Earnings - But Analysts Have Updated Their Models
Eternal Limited (NSE:ETERNAL) shareholders are probably feeling a little disappointed, since its shares fell 2.3% to ₹280 in the week after its latest quarterly results. It looks like a pretty bad result, all things considered. Although revenues of ₹202b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 65% to hit ₹0.10 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Eternal's 30 analysts is for revenues of ₹967.9b in 2027. This reflects a sizeable 44% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 257% to ₹1.68. Before this earnings report, the analysts had been forecasting revenues of ₹961.6b and earnings per share (EPS) of ₹2.05 in 2027. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
View our latest analysis for Eternal
The consensus price target held steady at ₹356, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Eternal, with the most bullish analyst valuing it at ₹506 and the most bearish at ₹190 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 62% growth on an annualised basis. That is in line with its 56% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 18% per year. So it's pretty clear that Eternal is forecast to grow substantially faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Eternal. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Eternal going out to 2029, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for Eternal that we have uncovered.
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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.