Results: Jubilant FoodWorks Limited Exceeded Expectations And The Consensus Has Updated Its Estimates

As you might know, Jubilant FoodWorks Limited (NSE:JUBLFOOD) just kicked off its latest third-quarter results with some very strong numbers. The company beat both earnings and revenue forecasts, with revenue of ₹11b, some 2.9% above estimates, and statutory earnings per share (EPS) coming in at ₹9.41, 55% ahead of expectations. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Jubilant FoodWorks

Taking into account the latest results, the consensus forecast from Jubilant FoodWorks' eleven analysts is for revenues of ₹45.9b in 2022, which would reflect a huge 44% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 234% to ₹40.33. In the lead-up to this report, the analysts had been modelling revenues of ₹45.4b and earnings per share (EPS) of ₹40.81 in 2022. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target rose 7.7% to ₹2,790despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Jubilant FoodWorks' earnings by assigning a price premium. 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 Jubilant FoodWorks analyst has a price target of ₹3,575 per share, while the most pessimistic values it at ₹1,150. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Jubilant FoodWorks' past performance and to peers in the same industry. It's clear from the latest estimates that Jubilant FoodWorks' rate of growth is expected to accelerate meaningfully, with the forecast 44% revenue growth noticeably faster than its historical growth of 7.1%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 29% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Jubilant FoodWorks to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Jubilant FoodWorks. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Jubilant FoodWorks analysts - going out to 2023, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Jubilant FoodWorks that you should be aware of.

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