Stock Analysis

Upgrade: The Latest Revenue Forecasts For Adani Green Energy Limited (NSE:ADANIGREEN)

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Shareholders in Adani Green Energy Limited (NSE:ADANIGREEN) may be thrilled to learn that the covering analyst has just delivered a major upgrade to their near-term forecasts. The analyst has sharply increased their revenue numbers, with a view that Adani Green Energy will make substantially more sales than they'd previously expected.

Following the upgrade, the current consensus from Adani Green Energy's solitary analyst is for revenues of ₹81b in 2023 which - if met - would reflect a substantial 22% increase on its sales over the past 12 months. Per-share earnings are expected to leap 39% to ₹4.19. Previously, the analyst had been modelling revenues of ₹73b and earnings per share (EPS) of ₹3.86 in 2023. The forecasts seem more optimistic now, with a nice increase in revenue and a small increase to earnings per share estimates.

Check out our latest analysis for Adani Green Energy

NSEI:ADANIGREEN Earnings and Revenue Growth February 26th 2023

As a result, it might be a surprise to see that the analyst has cut their price target 43% to ₹360, which could suggest the forecast improvement in performance is not expected to last.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Adani Green Energy's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Adani Green Energy's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 22% growth on an annualised basis. This is compared to a historical growth rate of 33% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.3% per year. So it's pretty clear that, while Adani Green Energy's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Fortunately, the analyst also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Adani Green Energy.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Adani Green Energy going out as far as 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.

Valuation is complex, but we're helping make it simple.

Find out whether Adani Green Energy is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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