Tarsons Products Limited (NSE:TARSONS) Analysts Are More Bearish Than They Used To Be

Today is shaping up negative for Tarsons Products Limited (NSE:TARSONS) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the current consensus from Tarsons Products' three analysts is for revenues of ₹2.8b in 2024 which - if met - would reflect a satisfactory 2.3% increase on its sales over the past 12 months. Statutory earnings per share are supposed to sink 15% to ₹11.20 in the same period. Previously, the analysts had been modelling revenues of ₹3.3b and earnings per share (EPS) of ₹17.00 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Tarsons Products

Despite the cuts to forecast earnings, there was no real change to the ₹692 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Tarsons Products' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.0% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 8.5% a year over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 18% annually for the foreseeable future. Although Tarsons Products' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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 Tarsons Products after the downgrade.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Tarsons Products 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.