Shareholders of Titan Company Limited (NSE:TITAN) will be pleased this week, given that the stock price is up 13% to ₹5,000 following its latest quarterly results. Revenues of ₹206b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of ₹26.96 an impressive 50% ahead of estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, Titan's eleven analysts currently expect revenues in 2027 to be ₹924.6b, approximately in line with the last 12 months. Statutory per-share earnings are expected to be ₹79.47, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of ₹986.9b and earnings per share (EPS) of ₹74.20 in 2027. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.
Check out our latest analysis for Titan
The consensus has made no major changes to the price target of ₹5,466, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Titan analyst has a price target of ₹6,007 per share, while the most pessimistic values it at ₹4,505. This is a very narrow spread of estimates, implying either that Titan is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.9% by the end of 2027. This indicates a significant reduction from annual growth of 24% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 14% annually for the foreseeable future. It's pretty clear that Titan's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Titan's earnings potential next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. The consensus price target held steady at ₹5,466, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Titan analysts - going out to 2029, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Titan you should be aware of.
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