Some Analysts Just Cut Their Rajratan Global Wire Limited (NSE:RAJRATAN) Estimates

The latest analyst coverage could presage a bad day for Rajratan Global Wire Limited (NSE:RAJRATAN), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the most recent consensus for Rajratan Global Wire from its three analysts is for revenues of ₹11b in 2024 which, if met, would be a major 22% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 25% to ₹28.73. Previously, the analysts had been modelling revenues of ₹13b and earnings per share (EPS) of ₹31.63 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

See our latest analysis for Rajratan Global Wire

The consensus price target fell 5.9% to ₹953, with the weaker earnings outlook clearly leading analyst valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Rajratan Global Wire, with the most bullish analyst valuing it at ₹1,040 and the most bearish at ₹844 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Rajratan Global Wire'shistorical trends, as the 17% annualised revenue growth to the end of 2024 is roughly in line with the 21% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 2.1% per year. So although Rajratan Global Wire is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Rajratan Global Wire's future valuation. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Rajratan Global Wire going forwards.

Unfortunately, the earnings downgrade - if accurate - may also place pressure on Rajratan Global Wire's mountain of debt, which could lead to some belt tightening for shareholders. See why we're concerned about Rajratan Global Wire's balance sheet by visiting our risks dashboard for free on our platform here.

You can also see our analysis of Rajratan Global Wire's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.