Brookfield India Real Estate Trust (NSE:BIRET) Analysts Just Cut Their EPS Forecasts Substantially

Market forces rained on the parade of Brookfield India Real Estate Trust (NSE:BIRET) shareholders today, when the analysts downgraded their forecasts for next year. 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 most recent consensus for Brookfield India Real Estate Trust from its six analysts is for revenues of ₹13b in 2023 which, if met, would be a major 59% increase on its sales over the past 12 months. Statutory earnings per share are presumed to shoot up 60% to ₹12.11. Before this latest update, the analysts had been forecasting revenues of ₹15b and earnings per share (EPS) of ₹13.95 in 2023. From this we can that analyst sentiment has definitely become more bearish after the latest update, leading to lower revenue forecasts and a real cut to earnings per share estimates.

View our latest analysis for Brookfield India Real Estate Trust

Analysts made no major changes to their price target of ₹317, suggesting the downgrades are not expected to have a long-term impact on Brookfield India Real Estate Trust's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Brookfield India Real Estate Trust, with the most bullish analyst valuing it at ₹330 and the most bearish at ₹285 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Brookfield India Real Estate Trust is an easy business to forecast or the underlying assumptions are obvious.

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. For example, we noticed that Brookfield India Real Estate Trust's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 45% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 17% a year over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 6.4% annually. Not only are Brookfield India Real Estate Trust's revenues expected to improve, it seems that the analysts are also expecting it 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 Brookfield India Real Estate Trust. 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 Brookfield India Real Estate Trust after the downgrade.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Brookfield India Real Estate Trust 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 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.