Sapphire Foods India Limited (NSE:SAPPHIRE) Released Earnings Last Week And Analysts Lifted Their Price Target To ₹1,608

It's been a good week for Sapphire Foods India Limited (NSE:SAPPHIRE) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.9% to ₹1,322. It was an okay report, and revenues came in at ₹5.5b, approximately in line with analyst estimates leading up to the results announcement. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Sapphire Foods India

After the latest results, the eight analysts covering Sapphire Foods India are now predicting revenues of ₹23.4b in 2023. If met, this would reflect a meaningful 19% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 46% to ₹19.90. In the lead-up to this report, the analysts had been modelling revenues of ₹22.5b and earnings per share (EPS) of ₹14.73 in 2023. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a considerable lift to earnings per share in particular.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 8.7% to ₹1,608per share. 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 Sapphire Foods India analyst has a price target of ₹1,700 per share, while the most pessimistic values it at ₹1,511. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sapphire Foods India's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Sapphire Foods India's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 27% growth on an annualised basis. This is compared to a historical growth rate of 63% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 17% per year. So it's pretty clear that, while Sapphire Foods India's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sapphire Foods India's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Sapphire Foods India analysts - going out to 2025, and you can see them free on our platform here.

We also provide an overview of the Sapphire Foods India Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.