Varun Beverages Limited (NSE:VBL) Analysts Are Pretty Bullish On The Stock After Recent Results

It's been a good week for Varun Beverages Limited (NSE:VBL) shareholders, because the company has just released its latest yearly results, and the shares gained 5.1% to ₹1,345. It was a credible result overall, with revenues of ₹160b and statutory earnings per share of ₹15.82 both in line with analyst estimates, showing that Varun Beverages is executing in line with expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Varun Beverages

Taking into account the latest results, the current consensus from Varun Beverages' 16 analysts is for revenues of ₹195.7b in 2024. This would reflect a substantial 22% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 22% to ₹19.23. Before this earnings report, the analysts had been forecasting revenues of ₹191.5b and earnings per share (EPS) of ₹19.02 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small increase to to revenue forecasts.

The consensus price target increased 13% to ₹1,396, with an improved revenue forecast carrying the promise of a more valuable business, in time. 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 Varun Beverages, with the most bullish analyst valuing it at ₹1,600 and the most bearish at ₹880 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Varun Beverages' past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Varun Beverages'historical trends, as the 22% annualised revenue growth to the end of 2024 is roughly in line with the 24% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 14% annually. So although Varun Beverages is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster 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 Varun Beverages going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Varun Beverages (1 is significant!) that you need to take into consideration.

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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.