Stock Analysis

Bharat Petroleum Corporation Limited Just Missed EPS By 17%: Here's What Analysts Think Will Happen Next

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It's been a good week for Bharat Petroleum Corporation Limited (NSE:BPCL) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.3% to ₹502. Results were mixed, with revenues of ₹1.2t exceeding expectations, even as earnings per share (EPS) came up short. Statutory earnings were ₹14.94 per share, -17% below whatthe analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Bharat Petroleum

NSEI:BPCL Earnings and Revenue Growth February 1st 2024

Taking into account the latest results, Bharat Petroleum's 14 analysts currently expect revenues in 2025 to be ₹4.43t, approximately in line with the last 12 months. Statutory earnings per share are forecast to plummet 58% to ₹55.48 in the same period. In the lead-up to this report, the analysts had been modelling revenues of ₹4.44t and earnings per share (EPS) of ₹53.07 in 2025. So the consensus seems to have become somewhat more optimistic on Bharat Petroleum's earnings potential following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.4% to ₹522. 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. There are some variant perceptions on Bharat Petroleum, with the most bullish analyst valuing it at ₹660 and the most bearish at ₹375 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.2% by the end of 2025. This indicates a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Bharat Petroleum is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Bharat Petroleum following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Bharat Petroleum's revenue is expected to perform worse 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 forecasts for Bharat Petroleum going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Bharat Petroleum you should be aware of, and 1 of them is potentially serious.

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

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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.