Analysts Just Published A Bright New Outlook For Techno Electric & Engineering Company Limited's (NSE:TECHNOE)

Techno Electric & Engineering Company Limited (NSE:TECHNOE) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory 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 market seems to be pricing in some improvement in the business too, with the stock up 5.6% over the past week, closing at ₹216. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the current consensus from Techno Electric & Engineering's six analysts is for revenues of ₹11b in 2021 which - if met - would reflect a huge 38% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 28% to ₹18.80. Prior to this update, the analysts had been forecasting revenues of ₹10b and earnings per share (EPS) of ₹15.48 in 2021. So it seems there's been a definite increase in optimism about Techno Electric & Engineering's future following the latest consensus numbers, with a very substantial lift in the earnings per share forecasts in particular.

View our latest analysis for Techno Electric & Engineering

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of ₹269, suggesting that the forecast performance does not have a long term impact on the company's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Techno Electric & Engineering analyst has a price target of ₹324 per share, while the most pessimistic values it at ₹230. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Techno Electric & Engineering's past performance and to peers in the same industry. For example, we noticed that Techno Electric & Engineering's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow 38%, well above its historical decline of 1.2% a year 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 14% per year. Not only are Techno Electric & Engineering's revenues expected to improve, it seems that the analysts are also expecting it 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 Techno Electric & Engineering 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. At Simply Wall St, we have a full range of analyst estimates for Techno Electric & Engineering going out to 2024, and you can see them free on our platform here..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. 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.
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