Tata Motors Limited Just Recorded A 81% EPS Beat: Here's What Analysts Are Forecasting Next
It's been a good week for Tata Motors Limited (NSE:TMCV) shareholders, because the company has just released its latest first-quarter results, and the shares gained 4.7% to ₹474. It looks like a credible result overall - although revenues of ₹207b were what the analysts expected, Tata Motors surprised by delivering a (statutory) profit of ₹6.95 per share, an impressive 81% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Tata Motors' twelve analysts is for revenues of ₹899.2b in 2027. This reflects a satisfactory 3.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 70% to ₹19.38. In the lead-up to this report, the analysts had been modelling revenues of ₹888.8b and earnings per share (EPS) of ₹18.03 in 2027. So the consensus seems to have become somewhat more optimistic on Tata Motors' earnings potential following these results.
See our latest analysis for Tata Motors
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.6% to ₹524. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Tata Motors analyst has a price target of ₹700 per share, while the most pessimistic values it at ₹424. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Tata Motors' growth to accelerate, with the forecast 4.2% annualised growth to the end of 2027 ranking favourably alongside historical growth of 2.9% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Tata Motors is expected to grow slower than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Tata Motors following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Tata Motors' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Tata Motors 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 Tata Motors 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.