What You Need To Know About The NMDC Limited (NSE:NMDC) Analyst Downgrade Today

Market forces rained on the parade of NMDC Limited (NSE:NMDC) shareholders today, when the analysts downgraded their forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the current consensus, from the eleven analysts covering NMDC, is for revenues of ₹206b in 2025, which would reflect a small 3.4% reduction in NMDC's sales over the past 12 months. Per-share earnings are expected to surge 25% to ₹25.11. Previously, the analysts had been modelling revenues of ₹241b and earnings per share (EPS) of ₹25.15 in 2025. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a measurable cut to revenues and reconfirming their earnings per share estimates.

See our latest analysis for NMDC

The consensus has reconfirmed its price target of ₹246, showing that the analysts don't expect weaker sales expectationsthis year to have a material impact on NMDC's market value.

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. We would highlight that sales are expected to reverse, with a forecast 4.5% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 12% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 11% annually for the foreseeable future. It's pretty clear that NMDC's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of NMDC going forwards.

Unfortunately, by using these new estimates as a starting point, we've run a discounted cash flow calculation (DCF) on NMDC that suggests the company could be somewhat overvalued. You can learn more about our valuation methodology for 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 downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.