Earnings Update: Here's Why Analysts Just Lifted Their Fortis Healthcare Limited (NSE:FORTIS) Price Target To ₹685

The second-quarter results for Fortis Healthcare Limited (NSE:FORTIS) were released last week, making it a good time to revisit its performance. Results were roughly in line with estimates, with revenues of ₹20b and statutory earnings per share of ₹7.93. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Fortis Healthcare

Taking into account the latest results, the current consensus from Fortis Healthcare's 15 analysts is for revenues of ₹78.3b in 2025. This would reflect a credible 7.0% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 21% to ₹10.51. In the lead-up to this report, the analysts had been modelling revenues of ₹78.5b and earnings per share (EPS) of ₹10.55 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target rose 22% to ₹685despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Fortis Healthcare's earnings by assigning a price premium. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Fortis Healthcare analyst has a price target of ₹725 per share, while the most pessimistic values it at ₹497. 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. It's clear from the latest estimates that Fortis Healthcare's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 12% 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 19% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Fortis Healthcare is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Fortis Healthcare'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.

With that in mind, we wouldn't be too quick to come to a conclusion on Fortis Healthcare. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Fortis Healthcare analysts - going out to 2027, and you can see them free on our platform here.

You can also see whether Fortis Healthcare is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.