Analyst Forecasts Just Became More Bearish On Aegis Logistics Limited (NSE:AEGISCHEM)

Market forces rained on the parade of Aegis Logistics Limited (NSE:AEGISCHEM) shareholders today, when the analysts downgraded their forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the current consensus from Aegis Logistics' three analysts is for revenues of ₹45b in 2022 which - if met - would reflect a meaningful 16% increase on its sales over the past 12 months. Per-share earnings are expected to surge 38% to ₹10.35. Prior to this update, the analysts had been forecasting revenues of ₹64b and earnings per share (EPS) of ₹11.11 in 2022. It looks like analyst sentiment has fallen somewhat in this update, with a pretty serious reduction to revenue estimates and a small dip in earnings per share numbers as well.

View our latest analysis for Aegis Logistics

Despite the cuts to forecast earnings, there was no real change to the ₹382 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Aegis Logistics, with the most bullish analyst valuing it at ₹422 and the most bearish at ₹326 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Aegis Logistics' rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 9.4% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Aegis Logistics 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. Given the stark change in sentiment, we'd understand if investors became more cautious on Aegis Logistics after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Aegis Logistics analysts - 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 downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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