Earnings Miss: CEAT Limited Missed EPS By 7.8% And Analysts Are Revising Their Forecasts

The yearly results for CEAT Limited (NSE:CEATLTD) were released last week, making it a good time to revisit its performance. Revenues of ₹120b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at ₹159, missing estimates by 7.8%. 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. 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.

See our latest analysis for CEAT

After the latest results, the 15 analysts covering CEAT are now predicting revenues of ₹131.1b in 2025. If met, this would reflect a solid 9.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 14% to ₹182. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹130.5b and earnings per share (EPS) of ₹177 in 2025. So the consensus seems to have become somewhat more optimistic on CEAT's earnings potential following these results.

The consensus price target was unchanged at ₹2,874, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic CEAT analyst has a price target of ₹3,400 per share, while the most pessimistic values it at ₹1,670. 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 9.6% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% annually. Factoring in the forecast slowdown in growth, it looks like CEAT is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards CEAT following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for CEAT going out to 2027, 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 CEAT you should be aware of.

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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.