Zydus Wellness Limited (NSE:ZYDUSWELL) shares fell 9.7% to ₹1,463 in the week since its latest second-quarter results. Revenues missed analyst forecasts badly, coming in 29% below estimates at ₹3.3b. Equally surprising was the fact that earnings per share of ₹40.10 beat analyst estimates by 17%. 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. Readers will be glad to know we’ve aggregated the latest forecasts to see whether analysts have changed their mind on Zydus Wellness after the latest results.

See our latest analysis for Zydus Wellness

NSEI:ZYDUSWELL Past and Future Earnings, November 18th 2019

Following the latest results, Zydus Wellness’s four analysts are now forecasting revenues of ₹18.2b in 2020. This would be a sizeable 21% improvement in sales compared to the last 12 months. Earnings per share are expected to grow 14% to ₹37.60. In the lead-up to this report, analysts had been modelling revenues of ₹18.5b and earnings per share (EPS) of ₹37.90 in 2020. So it’s pretty clear that, although analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at ₹1,708. 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. The most optimistic Zydus Wellness analyst has a price target of ₹1,800 per share, while the most pessimistic values it at ₹1,610. The narrow spread of estimates could suggest that the business’ future is relatively easy to value, or that analysts have a clear view on its prospects.

In addition, we can look to Zydus Wellness’s past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. We can infer from the latest estimates that analysts are expecting a continuation of Zydus Wellness’s historical trends, as next year’s forecast 21% revenue growth is roughly in line with 23% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So although Zydus Wellness is expected to maintain its revenue growth rate, it’s definitely expected to grow faster than the wider market.

The Bottom Line

The most important thing to take away is that there’s been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. 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 ₹1,708, 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 Zydus Wellness going out to 2022, and you can see them free on our platform here..

You can also view our analysis of Zydus Wellness’s balance sheet, and whether we think Zydus Wellness is carrying too much debt, for free on our platform here.

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 [email protected] 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.

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