Sterling and Wilson Renewable Energy Limited (NSE:SWSOLAR) Just Reported And Analysts Have Been Cutting Their Estimates

As you might know, Sterling and Wilson Renewable Energy Limited (NSE:SWSOLAR) recently reported its quarterly numbers. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 4.8%to hit ₹18b. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Sterling and Wilson Renewable Energy

After the latest results, the three analysts covering Sterling and Wilson Renewable Energy are now predicting revenues of ₹88.8b in 2026. If met, this would reflect a substantial 79% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 1,422% to ₹17.93. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹110.4b and earnings per share (EPS) of ₹28.33 in 2026. Indeed, we can see that the analysts are a lot more bearish about Sterling and Wilson Renewable Energy's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.

The consensus price target fell 21% to ₹653, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic Sterling and Wilson Renewable Energy analyst has a price target of ₹870 per share, while the most pessimistic values it at ₹525. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Sterling and Wilson Renewable Energy is forecast to grow faster in the future than it has in the past, with revenues expected to display 59% annualised growth until the end of 2026. If achieved, this would be a much better result than the 16% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 13% per year. So it looks like Sterling and Wilson Renewable Energy is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded Sterling and Wilson Renewable Energy's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Sterling and Wilson Renewable Energy going out to 2027, and you can see them free on our platform here.

Even so, be aware that Sterling and Wilson Renewable Energy is showing 1 warning sign in our investment analysis , 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.