Growth Investors: Industry Analysts Just Upgraded Their Hindustan Petroleum Corporation Limited (NSE:HINDPETRO) Revenue Forecasts By 13%

Shareholders in Hindustan Petroleum Corporation Limited (NSE:HINDPETRO) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Hindustan Petroleum will make substantially more sales than they'd previously expected. The stock price has risen 8.7% to ₹288 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the latest consensus from Hindustan Petroleum's ten analysts is for revenues of ₹3.0t in 2022, which would reflect a sizeable 31% improvement in sales compared to the last 12 months. Statutory earnings per share are supposed to plummet 35% to ₹46.21 in the same period. Prior to this update, the analysts had been forecasting revenues of ₹2.7t and earnings per share (EPS) of ₹45.03 in 2022. The forecasts seem more optimistic now, with a nice increase in revenue and a slight bump in earnings per share estimates.

Check out our latest analysis for Hindustan Petroleum

With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.7% to ₹333 per share. 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 Hindustan Petroleum, with the most bullish analyst valuing it at ₹515 and the most bearish at ₹239 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

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. It's clear from the latest estimates that Hindustan Petroleum's rate of growth is expected to accelerate meaningfully, with the forecast 31% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 5.2% 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 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Hindustan Petroleum is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Hindustan Petroleum.

Analysts are definitely bullish on Hindustan Petroleum, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including a weak balance sheet. For more information, you can click through to our platform to learn more about this and the 2 other flags we've identified .

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

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