It's been a mediocre week for PNB Housing Finance Limited (NSE:PNBHOUSING) shareholders, with the stock dropping 12% to ₹463 in the week since its latest quarterly results. Revenues were ₹5.0b, 13% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of ₹55.26 being in line with what the analysts forecast. 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 PNB Housing Finance after the latest results.
Following the recent earnings report, the consensus from four analysts covering PNB Housing Finance is for revenues of ₹22.3b in 2023, implying a noticeable 5.1% decline in sales compared to the last 12 months. Per-share earnings are expected to shoot up 45% to ₹68.10. Before this earnings report, the analysts had been forecasting revenues of ₹22.6b and earnings per share (EPS) of ₹68.37 in 2023. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of ₹553, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on PNB Housing Finance, with the most bullish analyst valuing it at ₹845 and the most bearish at ₹362 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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. We would highlight that sales are expected to reverse, with a forecast 4.1% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 11% 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 20% annually for the foreseeable future. It's pretty clear that PNB Housing Finance's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that PNB Housing Finance's revenues are expected to perform worse than the wider industry. The consensus price target held steady at ₹553, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on PNB Housing Finance. 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 PNB Housing Finance going out to 2024, 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 1 warning sign for PNB Housing Finance that you need to be mindful of.
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.