Analysts' Revenue Estimates For Blue Star Limited (NSE:BLUESTARCO) Are Surging Higher

By
Simply Wall St
Published
May 10, 2022
NSEI:BLUESTARCO
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Blue Star Limited (NSE:BLUESTARCO) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts have sharply increased their revenue numbers, with a view that Blue Star will make substantially more sales than they'd previously expected.

After the upgrade, the 15 analysts covering Blue Star are now predicting revenues of ₹73b in 2023. If met, this would reflect a sizeable 21% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 65% to ₹28.71. Before this latest update, the analysts had been forecasting revenues of ₹67b and earnings per share (EPS) of ₹27.33 in 2023. The forecasts seem more optimistic now, with a decent improvement in revenue and a slight bump in earnings per share estimates.

View our latest analysis for Blue Star

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NSEI:BLUESTARCO Earnings and Revenue Growth May 10th 2022

With these upgrades, we're not surprised to see that the analysts have lifted their price target 5.0% to ₹1,159 per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Blue Star at ₹1,273 per share, while the most bearish prices it at ₹560. This is a fairly broad spread of estimates, suggesting that the 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 clear from the latest estimates that Blue Star's rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 1.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Blue Star to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Blue Star.

Analysts are clearly in love with Blue Star at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as concerns around earnings quality. You can learn more, and discover the 1 other flag we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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