One Foods and Inns Limited (NSE:FOODSIN) Analyst Just Made A Major Cut To Next Year's Estimates

One thing we could say about the covering analyst on Foods and Inns Limited (NSE:FOODSIN) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business. Surprisingly the share price has been buoyant, rising 10% to ₹144 in the past 7 days. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

After this downgrade, Foods and Inns' solo analyst is now forecasting revenues of ₹11b in 2025. This would be a notable 10% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 91% to ₹7.70. Prior to this update, the analyst had been forecasting revenues of ₹12b and earnings per share (EPS) of ₹10.60 in 2025. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Foods and Inns

It'll come as no surprise then, to learn that the analyst has cut their price target 6.0% to ₹189.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Foods and Inns' revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2025 being well below the historical 27% p.a. growth over the last five years. Compare this to the 240 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 10% per year. So it's pretty clear that, while Foods and Inns' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Foods and Inns.

There might be good reason for analyst bearishness towards Foods and Inns, like its declining profit margins. Learn more, and discover the 2 other warning signs 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 downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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