Cipla Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Cipla Limited (NSE:CIPLA) just released its latest second-quarter report and things are not looking great. Cipla missed analyst forecasts, with revenues of ₹74b and statutory earnings per share (EPS) of ₹10.85, falling short by 2.4% and 9.2% respectively. 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.
Taking into account the latest results, the consensus forecast from Cipla's 35 analysts is for revenues of ₹305.7b in 2027. This reflects a notable 9.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 36% to ₹48.79. Before this earnings report, the analysts had been forecasting revenues of ₹309.3b and earnings per share (EPS) of ₹51.27 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
Check out our latest analysis for Cipla
The consensus price target held steady at ₹1,505, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 Cipla, with the most bullish analyst valuing it at ₹1,730 and the most bearish at ₹1,214 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. It's clear from the latest estimates that Cipla's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 6.8% p.a. over the past five years. 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 growth outlook is brighter than the recent past, the analysts also expect Cipla to grow faster than 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 Cipla. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at ₹1,505, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Cipla. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Cipla analysts - going out to 2029, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Cipla that you should be aware of.
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