Deepak Fertilisers And Petrochemicals Corporation Limited's (NSE:DEEPAKFERT) Sole Analyst Just Made A Meaningful Upgrade To Their Forecasts

Celebrations may be in order for Deepak Fertilisers And Petrochemicals Corporation Limited (NSE:DEEPAKFERT) shareholders, with the covering analyst delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analyst modelling a real improvement in business performance. The market seems to be pricing in some improvement in the business too, with the stock up 6.6% over the past week, closing at ₹619. Could this big upgrade push the stock even higher?

Following the upgrade, the current consensus from Deepak Fertilisers And Petrochemicals' one analyst is for revenues of ₹98b in 2023 which - if met - would reflect a substantial 28% increase on its sales over the past 12 months. Statutory earnings per share are forecast to be ₹56.90, approximately in line with the last 12 months. Previously, the analyst had been modelling revenues of ₹85b and earnings per share (EPS) of ₹51.20 in 2023. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

See our latest analysis for Deepak Fertilisers And Petrochemicals

It will come as no surprise to learn that the analyst has increased their price target for Deepak Fertilisers And Petrochemicals 7.8% to ₹900 on the back of these upgrades.

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 analyst is definitely expecting Deepak Fertilisers And Petrochemicals' growth to accelerate, with the forecast 28% annualised growth to the end of 2023 ranking favourably alongside historical growth of 4.6% 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 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Deepak Fertilisers And Petrochemicals to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that the analyst upgraded their earnings per share estimates for this year, expecting improving business conditions. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Deepak Fertilisers And Petrochemicals.

Better yet, our automated discounted cash flow calculation (DCF) suggests Deepak Fertilisers And Petrochemicals could be moderately undervalued. You can learn more about our valuation methodology 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.