CEAT Limited Just Recorded A 19% EPS Beat: Here's What Analysts Are Forecasting Next

Investors in CEAT Limited (NSE:CEATLTD) had a good week, as its shares rose 9.2% to close at ₹2,834 following the release of its third-quarter results. It looks like a credible result overall - although revenues of ₹30b were in line with what the analysts predicted, CEAT surprised by delivering a statutory profit of ₹44.87 per share, a notable 19% above expectations. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CEAT after the latest results.

Check out our latest analysis for CEAT

Following the latest results, CEAT's 17 analysts are now forecasting revenues of ₹130.0b in 2025. This would be a decent 9.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 2.3% to ₹169. Before this earnings report, the analysts had been forecasting revenues of ₹130.0b and earnings per share (EPS) of ₹161 in 2025. So the consensus seems to have become somewhat more optimistic on CEAT's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 5.3% to ₹2,623. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic CEAT analyst has a price target of ₹3,381 per share, while the most pessimistic values it at ₹1,400. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that CEAT's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.9% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than CEAT.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around CEAT's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.

With that in mind, we wouldn't be too quick to come to a conclusion on CEAT. 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 CEAT going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for CEAT 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.