Shoppers Stop Limited (NSE:SHOPERSTOP) Just Reported And Analysts Have Been Cutting Their Estimates
Shoppers Stop Limited (NSE:SHOPERSTOP) shareholders are probably feeling a little disappointed, since its shares fell 3.3% to ₹378 in the week after its latest first-quarter results. The results were positive, with revenue coming in at ₹13b, beating analyst expectations by 8.3%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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, Shoppers Stop's five analysts currently expect revenues in 2027 to be ₹51.1b, approximately in line with the last 12 months. Per-share statutory losses are expected to explode, reaching ₹0.075 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹56.4b and earnings per share (EPS) of ₹2.22 in 2027. There looks to have been a significant drop in sentiment regarding Shoppers Stop's prospects after these latest results, with a small dip in revenues and the analysts now forecasting a loss instead of a profit.
Check out our latest analysis for Shoppers Stop
The average price target was broadly unchanged at ₹429, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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 Shoppers Stop analyst has a price target of ₹600 per share, while the most pessimistic values it at ₹297. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shoppers Stop's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.7% by the end of 2027. This indicates a significant reduction from annual growth of 15% 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 8.2% annually for the foreseeable future. It's pretty clear that Shoppers Stop's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest low-light for us was that the forecasts for Shoppers Stop dropped from profits to a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at ₹429, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Shoppers Stop going out to 2029, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Shoppers Stop that you need to take into consideration.
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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.