Sona BLW Precision Forgings Limited (NSE:SONACOMS) Analysts Are Cutting Their Estimates: Here's What You Need To Know

Investors in Sona BLW Precision Forgings Limited (NSE:SONACOMS) had a good week, as its shares rose 9.7% to close at ₹699 following the release of its half-year results. Results were roughly in line with estimates, with revenues of ₹18b and statutory earnings per share of ₹2.42. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Sona BLW Precision Forgings

Following the latest results, Sona BLW Precision Forgings' 14 analysts are now forecasting revenues of ₹38.1b in 2025. This would be a solid 9.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 21% to ₹11.04. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹40.5b and earnings per share (EPS) of ₹11.74 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the ₹761 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. Currently, the most bullish analyst values Sona BLW Precision Forgings at ₹850 per share, while the most bearish prices it at ₹640. This is a very narrow spread of estimates, implying either that Sona BLW Precision Forgings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Sona BLW Precision Forgings'historical trends, as the 20% annualised revenue growth to the end of 2025 is roughly in line with the 19% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 10% annually. So it's pretty clear that Sona BLW Precision Forgings is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sona BLW Precision Forgings. They also downgraded Sona BLW Precision Forgings' revenue estimates, but industry data suggests that it is expected to grow faster than the wider 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 in mind, we wouldn't be too quick to come to a conclusion on Sona BLW Precision Forgings. 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 Sona BLW Precision Forgings going out to 2027, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for Sona BLW Precision Forgings that you need to be mindful 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.