These Analysts Just Made A Sizeable Downgrade To Their Techno Electric & Engineering Company Limited (NSE:TECHNOE) EPS Forecasts

Market forces rained on the parade of Techno Electric & Engineering Company Limited (NSE:TECHNOE) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the latest consensus from Techno Electric & Engineering's five analysts is for revenues of ₹12b in 2024, which would reflect a huge 36% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 96% to ₹16.90. Prior to this update, the analysts had been forecasting revenues of ₹16b and earnings per share (EPS) of ₹21.40 in 2024. Indeed, we can see that the analysts are a lot more bearish about Techno Electric & Engineering's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Techno Electric & Engineering

Analysts made no major changes to their price target of ₹411, suggesting the downgrades are not expected to have a long-term impact on Techno Electric & Engineering'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 Techno Electric & Engineering at ₹487 per share, while the most bearish prices it at ₹313. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Techno Electric & Engineering shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Techno Electric & Engineering's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 36% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 4.1% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 11% annually. 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 is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Techno Electric & Engineering after the downgrade.

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 2025, 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 downgrading 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. 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.