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Earnings Beat: Jagran Prakashan Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Simply Wall St

Jagran Prakashan Limited (NSE:JAGRAN) 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 looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at ₹5.1b, earnings beat expectations by a notable 194%, coming in at ₹4.12 per share. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings consensus estimates to see what could be in store for next year.

View our latest analysis for Jagran Prakashan

NSEI:JAGRAN Past and Future Earnings, November 16th 2019

Taking into account the latest results, the eight analysts covering Jagran Prakashan provided consensus estimates of ₹22.3b revenue in 2020, which would reflect a discernible 3.1% decline on its sales over the past 12 months. Earnings per share are forecast to decrease 5.9% to ₹10.17 in the same period. Yet prior to the latest earnings, analysts had been forecasting revenues of ₹24.3b and earnings per share (EPS) of ₹10.17 in 2020. So it looks like analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is expected to maintain EPS.

The average price target was steady at ₹98.80 even though revenue estimates declined; likely suggesting analysts place a higher value on earnings. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Jagran Prakashan at ₹145 per share, while the most bearish prices it at ₹63.00. 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.

Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. These estimates imply that sales are expected to slow, with a forecast revenue decline of 3.1% a significant reduction from annual growth of 6.0% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 11% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Jagran Prakashan to grow slower 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. Unfortunately, analysts also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider market. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Jagran Prakashan analysts - going out to 2022, and you can see them free on our platform here.

We also provide an overview of the Jagran Prakashan Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, 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 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.