These Analysts Think Century Plyboards (India) Limited's (NSE:CENTURYPLY) Earnings Are Under Threat

Market forces rained on the parade of Century Plyboards (India) Limited (NSE:CENTURYPLY) shareholders today, when the analysts downgraded their forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the current consensus, from the seven analysts covering Century Plyboards (India), is for revenues of ₹19b in 2021, which would reflect a considerable 18% reduction in Century Plyboards (India)'s sales over the past 12 months. Prior to the latest estimates, the analysts were forecasting revenues of ₹22b in 2021. It looks like forecasts have become a fair bit less optimistic on Century Plyboards (India), given the measurable cut to revenue estimates.

View our latest analysis for Century Plyboards (India)

The consensus price target fell 5.4% to ₹155, with the analysts clearly less optimistic about Century Plyboards (India)'s valuation following this update. 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. There are some variant perceptions on Century Plyboards (India), with the most bullish analyst valuing it at ₹213 and the most bearish at ₹99.24 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 18%, a significant reduction from annual growth of 8.5% 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 8.4% annually for the foreseeable future. It's pretty clear that Century Plyboards (India)'s revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Century Plyboards (India) this year. They're also anticipating slower revenue growth than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

But wait - there's more! At least one of Century Plyboards (India)'s seven analysts has provided estimates out to 2022, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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