Techno Electric & Engineering Company Limited Just Reported Second-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?
Techno Electric & Engineering Company Limited (NSE:TECHNOE) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was a workmanlike result, with revenues of ₹2.6b coming in 4.6% ahead of expectations, and earnings per share of ₹17.16, in line with analyst appraisals. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent forecasts to see whether analysts have changed their earnings models, following these results.
View our latest analysis for Techno Electric & Engineering
After the latest results, the seven analysts covering Techno Electric & Engineering are now predicting revenues of ₹12.1b in 2020. If met, this would reflect a substantial 26% improvement in sales compared to the last 12 months. Earnings per share are expected to grow 16% to ₹21.70. In the lead-up to this report, analysts had been modelling revenues of ₹12.3b and earnings per share (EPS) of ₹20.60 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of ₹289, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Techno Electric & Engineering, with the most bullish analyst valuing it at ₹362 and the most bearish at ₹244 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Techno Electric & Engineering's performance in recent years. It's clear from the latest estimates that Techno Electric & Engineering's rate of growth is expected to accelerate meaningfully, with forecast 26% revenue growth noticeably faster than its historical growth of 5.7%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect Techno Electric & Engineering to grow faster than the wider market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Techno Electric & Engineering's earnings potential next year. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at ₹289, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Techno Electric & Engineering going out to 2021, and you can see them free on our platform here..
You can also see our analysis of Techno Electric & Engineering's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
