Stock Analysis

Analysts Are Betting On Aegis Logistics Limited (NSE:AEGISCHEM) With A Big Upgrade This Week

NSEI:AEGISLOG
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Celebrations may be in order for Aegis Logistics Limited (NSE:AEGISCHEM) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus estimated revenue numbers rose, with their view now clearly much more bullish on the company's business prospects.

Following the upgrade, the most recent consensus for Aegis Logistics from its twin analysts is for revenues of ₹60b in 2023 which, if met, would be a sizeable 29% increase on its sales over the past 12 months. Per-share earnings are expected to soar 27% to ₹12.95. Before this latest update, the analysts had been forecasting revenues of ₹53b and earnings per share (EPS) of ₹12.77 in 2023. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.

See our latest analysis for Aegis Logistics

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NSEI:AEGISCHEM Earnings and Revenue Growth June 2nd 2022

Even though revenue forecasts increased, there was no change to the consensus price target of ₹320, suggesting the analysts are focused on earnings as the driver of value creation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Aegis Logistics, with the most bullish analyst valuing it at ₹410 and the most bearish at ₹239 per share. 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 Aegis Logistics' past performance and to peers in the same industry. For example, we noticed that Aegis Logistics' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 29% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 1.5% 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 9.4% annually. Not only are Aegis Logistics' 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 obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Aegis Logistics.

Analysts are clearly in love with Aegis Logistics at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as concerns around earnings quality. You can learn more, and discover the 1 other concern we've identified, for 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.

Valuation is complex, but we're helping make it simple.

Find out whether Aegis Logistics is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.