Earnings Update: Shoppers Stop Limited (NSE:SHOPERSTOP) Just Reported And Analysts Are Trimming Their Forecasts
Shoppers Stop Limited (NSE:SHOPERSTOP) shareholders are probably feeling a little disappointed, since its shares fell 9.6% to ₹348 in the week after its latest second-quarter results. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 7.7%to hit ₹14b. 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 current consensus, from the four analysts covering Shoppers Stop, is for revenues of ₹51.0b in 2027. This implies a noticeable 3.5% reduction in Shoppers Stop's revenue over the past 12 months. Shoppers Stop is also expected to turn profitable, with statutory earnings of ₹0.53 per share. In the lead-up to this report, the analysts had been modelling revenues of ₹56.3b and earnings per share (EPS) of ₹4.63 in 2027. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.
See our latest analysis for Shoppers Stop
Despite the cuts to forecast earnings, there was no real change to the ₹430 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Shoppers Stop, with the most bullish analyst valuing it at ₹550 and the most bearish at ₹336 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
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. We would highlight that revenue is expected to reverse, with a forecast 6.9% annualised decline to the end of 2027. That is a notable change from historical growth of 13% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.8% annually for the foreseeable future. It's pretty clear that Shoppers Stop's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share 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 in mind, we wouldn't be too quick to come to a conclusion on Shoppers Stop. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Shoppers Stop going out to 2029, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 1 warning sign for Shoppers Stop you should be aware of.
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