Need To Know: Analysts Are Much More Bullish On JSW Energy Limited (NSE:JSWENERGY) Revenues

Shareholders in JSW Energy Limited (NSE:JSWENERGY) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that JSW Energy will make substantially more sales than they'd previously expected. Investor sentiment seems to be improving too, with the share price up 4.8% to ₹259 over the past 7 days. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.

After this upgrade, JSW Energy's seven analysts are now forecasting revenues of ₹128b in 2024. This would be a meaningful 17% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to be ₹9.15, roughly flat on the last 12 months. Before this latest update, the analysts had been forecasting revenues of ₹108b and earnings per share (EPS) of ₹9.10 in 2024. It seems analyst sentiment has certainly become more bullish on revenues, even though they haven't changed their view on earnings per share.

View our latest analysis for JSW Energy

The consensus price target increased 7.9% to ₹249, with an improved revenue forecast carrying the promise of a more valuable business, in time. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values JSW Energy at ₹320 per share, while the most bearish prices it at ₹160. 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.

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. The analysts are definitely expecting JSW Energy's growth to accelerate, with the forecast 17% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that JSW Energy is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. They also upgraded their revenue forecasts, although the latest estimates suggest that JSW Energy will grow in line with the overall market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at JSW Energy.

Analysts are definitely bullish on JSW Energy, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including its declining profit margins. You can learn more, and discover the 2 other warning signs we've identified, for 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.