Time To Worry? Analysts Are Downgrading Their Shyam Metalics and Energy Limited (NSE:SHYAMMETL) Outlook

One thing we could say about the analysts on Shyam Metalics and Energy Limited (NSE:SHYAMMETL) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the latest consensus from Shyam Metalics and Energy's five analysts is for revenues of ₹152b in 2024, which would reflect a sizeable 21% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to dip 5.2% to ₹37.80 in the same period. Before this latest update, the analysts had been forecasting revenues of ₹173b and earnings per share (EPS) of ₹42.45 in 2024. Indeed, we can see that the analysts are a lot more bearish about Shyam Metalics and Energy's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Shyam Metalics and Energy

Despite the cuts to forecast earnings, there was no real change to the ₹572 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Shyam Metalics and Energy's rate of growth is expected to accelerate meaningfully, with the forecast 47% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 27% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shyam Metalics and Energy to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Shyam Metalics and Energy. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on Shyam Metalics and Energy after the downgrade.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Shyam Metalics and Energy analysts - going out to 2026, 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 downgrading 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.