As you might know, Tata Consultancy Services Limited (NSE:TCS) recently reported its first-quarter numbers. It was a credible result overall, with revenues of ₹723b and statutory earnings per share of ₹36.90 both in line with analyst estimates, showing that Tata Consultancy Services is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, Tata Consultancy Services' 41 analysts are now forecasting revenues of ₹2.91t in 2027. This would be a credible 5.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 12% to ₹154. In the lead-up to this report, the analysts had been modelling revenues of ₹2.90t and earnings per share (EPS) of ₹156 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
See our latest analysis for Tata Consultancy Services
The consensus price target fell 9.5% to ₹2,481, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the quarterly results. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Tata Consultancy Services at ₹3,655 per share, while the most bearish prices it at ₹1,800. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Tata Consultancy Services'historical trends, as the 7.3% annualised revenue growth to the end of 2027 is roughly in line with the 8.4% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.9% annually. It's clear that while Tata Consultancy Services' revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Tata Consultancy Services going out to 2029, and you can see them free on our platform here..
We also provide an overview of the Tata Consultancy Services Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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.