Avenue Supermarts Limited (NSE:DMART) shareholders are probably feeling a little disappointed, since its shares fell 5.7% to ₹3,365 in the week after its latest quarterly results. Revenues were in line with forecasts, at ₹196b, although statutory earnings per share came in 18% below what the analysts expected, at ₹11.40 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Avenue Supermarts' 21 analysts is for revenues of ₹806.3b in 2027. This would reflect a meaningful 8.6% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 9.9% to ₹52.50. Before this earnings report, the analysts had been forecasting revenues of ₹805.2b and earnings per share (EPS) of ₹54.39 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
See our latest analysis for Avenue Supermarts
It might be a surprise to learn that the consensus price target fell 7.1% to ₹3,927, with the analysts clearly linking lower forecast earnings to the performance of the stock price. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Avenue Supermarts analyst has a price target of ₹5,723 per share, while the most pessimistic values it at ₹3,150. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Avenue Supermarts' past performance and to peers in the same industry. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 18% growth on an annualised basis. That is in line with its 18% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.8% annually. So it's pretty clear that Avenue Supermarts is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider 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.
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 Avenue Supermarts going out to 2029, and you can see them free on our platform here..
You can also view our analysis of Avenue Supermarts' balance sheet, and whether we think Avenue Supermarts is carrying too much debt, for 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.