Stock Analysis

JSW Steel Limited Just Recorded A 9.8% EPS Beat: Here's What Analysts Are Forecasting Next

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Last week saw the newest quarterly earnings release from JSW Steel Limited (NSE:JSWSTEEL), an important milestone in the company's journey to build a stronger business. JSW Steel reported ₹419b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of ₹9.88 beat expectations, being 9.8% higher than what the analysts expected. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for JSW Steel

NSEI:JSWSTEEL Earnings and Revenue Growth January 28th 2024

Following the latest results, JSW Steel's 28 analysts are now forecasting revenues of ₹1.93t in 2025. This would be a solid 9.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 40% to ₹64.33. Before this earnings report, the analysts had been forecasting revenues of ₹1.94t and earnings per share (EPS) of ₹64.78 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at ₹805. 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 JSW Steel at ₹999 per share, while the most bearish prices it at ₹599. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that JSW Steel's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 7.8% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.4% annually. Factoring in the forecast slowdown in growth, it looks like JSW Steel is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for JSW Steel going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for JSW Steel you should know about.

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Find out whether JSW Steel is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.