Analysts Just Made A Major Revision To Their Jubilant Pharmova Limited (NSE:JUBILANT) Revenue Forecasts

The latest analyst coverage could presage a bad day for Jubilant Pharmova Limited (NSE:JUBILANT), 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 latest downgrade, the current consensus, from the six analysts covering Jubilant Pharmova, is for revenues of ₹82b in 2022, which would reflect an uncomfortable 11% reduction in Jubilant Pharmova's sales over the past 12 months. Statutory earnings per share are presumed to surge 27% to ₹66.24. Prior to this update, the analysts had been forecasting revenues of ₹104b and earnings per share (EPS) of ₹65.98 in 2022. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a pretty serious reduction to revenues and reconfirming their earnings per share estimates.

Check out our latest analysis for Jubilant Pharmova

The consensus price target rose 5.0% to ₹989, with the analysts apparently satisfied with the business performance despite lower revenue forecasts. 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 Jubilant Pharmova analyst has a price target of ₹1,157 per share, while the most pessimistic values it at ₹819. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. These estimates imply that sales are expected to slow, with a forecast revenue decline of 11%, a significant reduction from annual growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 11% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Jubilant Pharmova is expected to lag 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Jubilant Pharmova's revenues are expected to grow slower than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Jubilant Pharmova going forwards.

Worse, Jubilant Pharmova is labouring under a substantial debt burden, which - if today's forecasts prove accurate - the forecast downgrade could potentially exacerbate. See why we're concerned about Jubilant Pharmova's balance sheet by visiting our risks dashboard for free on our platform here.

We also provide an overview of the Jubilant Pharmova Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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