Analysts Have Just Cut Their Gujarat State Petronet Limited (NSE:GSPL) Revenue Estimates By 17%

One thing we could say about the analysts on Gujarat State Petronet Limited (NSE:GSPL) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the consensus from 16 analysts covering Gujarat State Petronet is for revenues of ₹144b in 2024, implying an uneasy 16% decline in sales compared to the last 12 months. Statutory earnings per share are presumed to increase 3.4% to ₹28.55. Previously, the analysts had been modelling revenues of ₹173b and earnings per share (EPS) of ₹30.05 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a minor downgrade to earnings per share numbers as well.

Check out our latest analysis for Gujarat State Petronet

The consensus price target fell 10% to ₹351, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. We would highlight that sales are expected to reverse, with a forecast 16% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 15% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 2.6% per year. The forecasts do look bearish for Gujarat State Petronet, since they're expecting it to shrink faster than the 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 Gujarat State Petronet. Unfortunately they also cut their revenue estimates for this year, and they expect sales to lag the wider market. That said, earnings per share are more important for creating value for shareholders. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Gujarat State Petronet's future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Gujarat State Petronet after today.

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 Gujarat State Petronet going out to 2026, and you can see them free on our platform here.

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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.