Analysts Just Made An Upgrade To Their InterGlobe Aviation Limited (NSE:INDIGO) Forecasts

Shareholders in InterGlobe Aviation Limited (NSE:INDIGO) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 9.3% over the past week, closing at ₹1,816. Could this big upgrade push the stock even higher?

Following the upgrade, the most recent consensus for InterGlobe Aviation from its ten analysts is for revenues of ₹473b in 2023 which, if met, would be a huge 96% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting ₹1.59 in per-share earnings. However, before this estimates update, the consensus had been expecting revenues of ₹396b and ₹18.31 per share in losses. So we can see that this has sparked a pretty clear upgrade to expectations, with higher revenues anticipated to lead to profit sooner than previously forecast.

See our latest analysis for InterGlobe Aviation

As a result, it might be a surprise to see that the analysts have cut their price target 5.0% to ₹2,063, which could suggest the forecast improvement in performance is not expected to last. 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 InterGlobe Aviation at ₹3,000 per share, while the most bearish prices it at ₹1,354. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting InterGlobe Aviation's growth to accelerate, with the forecast 96% annualised growth to the end of 2023 ranking favourably alongside historical growth of 0.3% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 23% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect InterGlobe Aviation to grow faster than the wider industry.

The Bottom Line

The most important thing to take away from this upgrade is that the consensus now expects InterGlobe Aviation to become profitable this year. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The declining price target is a puzzle, but still - with a serious upgrade to this year's expectations, it might be time to take another look at InterGlobe Aviation.

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 InterGlobe Aviation 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 upgrading 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.