Metro Brands Limited Just Missed EPS By 11%: Here's What Analysts Think Will Happen Next
Metro Brands Limited (NSE:METROBRAND) shareholders are probably feeling a little disappointed, since its shares fell 4.7% to ₹981 in the week after its latest quarterly results. Revenues were in line with forecasts, at ₹7.2b, although statutory earnings per share came in 11% below what the analysts expected, at ₹3.43 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Metro Brands after the latest results.
Taking into account the latest results, the consensus forecast from Metro Brands' 21 analysts is for revenues of ₹33.1b in 2027. This reflects a solid 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 15% to ₹17.19. Before this earnings report, the analysts had been forecasting revenues of ₹33.6b and earnings per share (EPS) of ₹18.00 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
Check out our latest analysis for Metro Brands
It might be a surprise to learn that the consensus price target was broadly unchanged at ₹1,221, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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 Metro Brands at ₹1,400 per share, while the most bearish prices it at ₹1,040. This is a very narrow spread of estimates, implying either that Metro Brands is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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 analysts are definitely expecting Metro Brands' growth to accelerate, with the forecast 16% annualised growth to the end of 2027 ranking favourably alongside historical growth of 9.2% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Metro Brands is expected to grow at about the same rate as the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Metro Brands. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Metro Brands going out to 2029, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months 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.