Need To Know: Analysts Are Much More Bullish On Craftsman Automation Limited (NSE:CRAFTSMAN)

Craftsman Automation Limited (NSE:CRAFTSMAN) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The stock price has risen 5.4% to ₹3,459 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the latest consensus from Craftsman Automation's six analysts is for revenues of ₹46b in 2024, which would reflect a huge 60% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 70% to ₹178. Before this latest update, the analysts had been forecasting revenues of ₹40b and earnings per share (EPS) of ₹160 in 2024. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Check out our latest analysis for Craftsman Automation

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of ₹3,963, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. Currently, the most bullish analyst values Craftsman Automation at ₹4,300 per share, while the most bearish prices it at ₹3,695. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Craftsman Automation's rate of growth is expected to accelerate meaningfully, with the forecast 60% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Craftsman Automation to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Craftsman Automation could be a good candidate for more research.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Craftsman Automation analysts - going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Craftsman Automation Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.