The Godrej Properties Limited (NSE:GODREJPROP) Analysts Have Been Trimming Their Sales Forecasts

The analysts covering Godrej Properties Limited (NSE:GODREJPROP) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. 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 downgrade, the current consensus from Godrej Properties' 16 analysts is for revenues of ₹21b in 2023 which - if met - would reflect a reasonable 4.7% increase on its sales over the past 12 months. Statutory earnings per share are presumed to leap 54% to ₹22.14. Previously, the analysts had been modelling revenues of ₹21b and earnings per share (EPS) of ₹22.24 in 2023. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business.

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There were no changes to revenue or earnings estimates or the price target of ₹1,434, suggesting that the company has been performing in line with expectations. 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. Currently, the most bullish analyst values Godrej Properties at ₹1,887 per share, while the most bearish prices it at ₹1,000. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Godrej Properties' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 9.6% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 8.4% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 15% per year. So although Godrej Properties' revenue growth is expected to improve, it is still expected to grow slower than the 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. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data indicates that Godrej Properties' revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Godrej Properties going forwards.

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 Godrej Properties analysts - going out to 2025, 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.