Astec LifeSciences Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Astec LifeSciences Limited (NSE:ASTEC) investors will be delighted, with the company turning in some strong numbers with its latest results. The company beat expectations with revenues of ₹6.9b arriving 5.4% ahead of forecasts. Statutory earnings per share (EPS) were ₹45.85, 6.9% ahead of estimates. 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.

Check out our latest analysis for Astec LifeSciences

Taking into account the latest results, the consensus forecast from Astec LifeSciences' four analysts is for revenues of ₹8.52b in 2023, which would reflect a major 24% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to climb 20% to ₹54.93. Before this earnings report, the analysts had been forecasting revenues of ₹7.68b and earnings per share (EPS) of ₹48.30 in 2023. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.

It will come as no surprise to learn that the analysts have increased their price target for Astec LifeSciences 5.2% to ₹1,812on the back of these upgrades. 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. The most optimistic Astec LifeSciences analyst has a price target of ₹2,345 per share, while the most pessimistic values it at ₹1,073. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Astec LifeSciences' rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 15% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Astec LifeSciences is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Astec LifeSciences' earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Astec LifeSciences. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Astec LifeSciences analysts - going out to 2025, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Astec LifeSciences (2 make us uncomfortable) you should be aware of.

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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.