Fortis Healthcare Limited Just Missed EPS By 19%: Here's What Analysts Think Will Happen Next

Fortis Healthcare Limited (NSE:FORTIS) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Fortis Healthcare missed earnings this time around, with ₹17b revenue coming in 3.2% below what the analysts had modelled. Statutory earnings per share (EPS) of ₹1.78 also fell short of expectations by 19%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 Fortis Healthcare

Taking into account the latest results, the most recent consensus for Fortis Healthcare from 14 analysts is for revenues of ₹79.8b in 2025. If met, it would imply a notable 18% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 49% to ₹10.94. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹80.3b and earnings per share (EPS) of ₹11.17 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 8.6% to ₹472, suggesting the revised estimates are not indicative of a weaker long-term future for the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Fortis Healthcare, with the most bullish analyst valuing it at ₹515 and the most bearish at ₹390 per share. This is a very narrow spread of estimates, implying either that Fortis Healthcare is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Fortis Healthcare's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 10% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Fortis Healthcare is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Fortis Healthcare. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Fortis Healthcare going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Fortis Healthcare's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.