New Forecasts: Here's What Analysts Think The Future Holds For Sharda Cropchem Limited (NSE:SHARDACROP)

Sharda Cropchem Limited (NSE:SHARDACROP) shareholders will have a reason to smile today, with the analysts making substantial upgrades to next year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The market may be pricing in some blue sky too, with the share price gaining 58% to ₹578 in the last 7 days. Could this upgrade be enough to drive the stock even higher?

Following the upgrade, the most recent consensus for Sharda Cropchem from its seven analysts is for revenues of ₹39b in 2023 which, if met, would be a sizeable 21% increase on its sales over the past 12 months. Per-share earnings are expected to soar 20% to ₹40.73. Before this latest update, the analysts had been forecasting revenues of ₹34b and earnings per share (EPS) of ₹29.97 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.

View our latest analysis for Sharda Cropchem

With these upgrades, we're not surprised to see that the analysts have lifted their price target 39% to ₹626 per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Sharda Cropchem, with the most bullish analyst valuing it at ₹716 and the most bearish at ₹560 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

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. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 17% growth on an annualised basis. That is in line with its 14% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 14% per year. So although Sharda Cropchem is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider 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 next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Sharda Cropchem 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 estimates - from multiple Sharda Cropchem analysts - going out to 2024, 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. 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.