Upgrade: Analysts Just Made A Notable Increase To Their Nesco Limited (NSE:NESCO) Forecasts

Nesco Limited (NSE:NESCO) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's forecasts. The analyst greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the current consensus from Nesco's solo analyst is for revenues of ₹5.3b in 2023 which - if met - would reflect a substantial 31% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 45% to ₹41.30. Previously, the analyst had been modelling revenues of ₹4.5b and earnings per share (EPS) of ₹34.40 in 2023. So we can see there's been a pretty clear increase in analyst sentiment in recent times, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Our analysis indicates that NESCO is potentially undervalued!

With these upgrades, we're not surprised to see that the analyst has lifted their price target 11% to ₹864 per share.

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 Nesco's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 31% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 6.2% 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 15% annually. Not only are Nesco's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Nesco could be worth investigating further.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for Nesco going out as far as 2024, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.