Need To Know: Analysts Are Much More Bullish On NMDC Limited (NSE:NMDC)

Shareholders in NMDC Limited (NSE:NMDC) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.

Following the upgrade, the current consensus from NMDC's dual analysts is for revenues of ₹304b in 2022 which - if met - would reflect a huge 98% increase on its sales over the past 12 months. Per-share earnings are expected to surge 59% to ₹32.90. Previously, the analysts had been modelling revenues of ₹154b and earnings per share (EPS) of ₹23.70 in 2022. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Check out our latest analysis for NMDC

It will come as no surprise to learn that the analysts have increased their price target for NMDC 13% to ₹186 on the back of these upgrades. 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. The most optimistic NMDC analyst has a price target of ₹248 per share, while the most pessimistic values it at ₹100. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting NMDC's growth to accelerate, with the forecast 98% annualised growth to the end of 2022 ranking favourably alongside historical growth of 9.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that NMDC 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. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, NMDC could be worth investigating further.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for NMDC going out as far as 2023, 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. 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.
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