Upgrade: Analysts Just Made A Captivating Increase To Their Sagar Cements Limited (NSE:SAGCEM) Forecasts

Shareholders in Sagar Cements Limited (NSE:SAGCEM) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. Sagar Cements has also found favour with investors, with the stock up a worthy 18% to ₹749 over the past week. It will be interesting to see if today's upgrade is enough to propel the stock even higher.

Following the upgrade, the most recent consensus for Sagar Cements from its four analysts is for revenues of ₹13b in 2021 which, if met, would be a meaningful 9.8% increase on its sales over the past 12 months. Per-share earnings are expected to grow 19% to ₹41.97. Previously, the analysts had been modelling revenues of ₹11b and earnings per share (EPS) of ₹38.07 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for Sagar Cements

It will come as no surprise to learn that the analysts have increased their price target for Sagar Cements 25% to ₹756 on the back of these upgrades. 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 Sagar Cements, with the most bullish analyst valuing it at ₹935 and the most bearish at ₹630 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Sagar Cements'historical trends, as next year's 9.8% revenue growth is roughly in line with 12% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So it's pretty clear that Sagar Cements is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Sagar Cements could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Sagar Cements going out to 2023, and you can see them 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. 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.
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