News Flash: Analysts Just Made A Sizeable Upgrade To Their Coromandel International Limited (NSE:COROMANDEL) Forecasts

Celebrations may be in order for Coromandel International Limited (NSE:COROMANDEL) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline. The stock price has risen 7.5% to ₹910 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

After this upgrade, Coromandel International's seven analysts are now forecasting revenues of ₹230b in 2023. This would be a major 20% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to increase 8.2% to ₹56.33. Before this latest update, the analysts had been forecasting revenues of ₹193b and earnings per share (EPS) of ₹54.47 in 2023. The forecasts seem more optimistic now, with a nice gain to revenue and a small increase to earnings per share estimates.

Check out our latest analysis for Coromandel International

Despite these upgrades, the analysts have not made any major changes to their price target of ₹1,057, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Coromandel International at ₹1,202 per share, while the most bearish prices it at ₹990. This is a very narrow spread of estimates, implying either that Coromandel International 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. The analysts are definitely expecting Coromandel International's growth to accelerate, with the forecast 20% annualised growth to the end of 2023 ranking favourably alongside historical growth of 11% per annum 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 14% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Coromandel International is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Coromandel International.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Coromandel International going out to 2025, and you can see them 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.