News Flash: Analysts Just Made A Sizeable Upgrade To Their JK Paper Limited (NSE:JKPAPER) Forecasts

Celebrations may be in order for JK Paper Limited (NSE:JKPAPER) shareholders, with the analysts 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 analysts modelling a real improvement in business performance. JK Paper has also found favour with investors, with the stock up a noteworthy 13% to ₹385 over the past week. We'll be curious to see if these new estimates convince the market to lift the stock price higher still.

Following the upgrade, the current consensus from JK Paper's twin analysts is for revenues of ₹56b in 2023 which - if met - would reflect a decent 19% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 41% to ₹58.25. Before this latest update, the analysts had been forecasting revenues of ₹48b and earnings per share (EPS) of ₹47.10 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.

Check out our latest analysis for JK Paper

With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.7% to ₹441 per share. 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. There are some variant perceptions on JK Paper, with the most bullish analyst valuing it at ₹452 and the most bearish at ₹430 per share. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the JK Paper's past performance and to peers in the same industry. It's clear from the latest estimates that JK Paper's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 11% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that JK Paper is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at JK Paper.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for JK Paper going out as far as 2024, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.