Prince Pipes and Fittings Limited (NSE:PRINCEPIPE) Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

As you might know, Prince Pipes and Fittings Limited (NSE:PRINCEPIPE) just kicked off its latest full-year results with some very strong numbers. The company beat expectations with revenues of ₹27b arriving 4.0% ahead of forecasts. Statutory earnings per share (EPS) were ₹22.62, 3.3% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Prince Pipes and Fittings

Taking into account the latest results, the consensus forecast from Prince Pipes and Fittings' seven analysts is for revenues of ₹28.9b in 2023, which would reflect a decent 8.8% improvement in sales compared to the last 12 months. Per-share earnings are expected to increase 9.0% to ₹24.59. In the lead-up to this report, the analysts had been modelling revenues of ₹29.0b and earnings per share (EPS) of ₹24.76 in 2023. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at ₹840. 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 Prince Pipes and Fittings at ₹1,000 per share, while the most bearish prices it at ₹756. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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 Prince Pipes and Fittings' revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 8.8% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 15% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Prince Pipes and Fittings.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at ₹840, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Prince Pipes and Fittings going out to 2024, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Prince Pipes and Fittings (of which 1 doesn't sit too well with us!) you should know about.

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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.