Avenue Supermarts Limited (NSE:DMART) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Avenue Supermarts Limited (NSE:DMART) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like the results were a bit of a negative overall. While revenues of ₹188b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.2% to hit ₹13.20 per share. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the consensus forecast from Avenue Supermarts' 19 analysts is for revenues of ₹807.4b in 2027. This reflects a solid 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 16% to ₹54.40. Before this earnings report, the analysts had been forecasting revenues of ₹824.1b and earnings per share (EPS) of ₹55.76 in 2027. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

See our latest analysis for Avenue Supermarts

Despite the cuts to forecast earnings, there was no real change to the ₹4,341 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Avenue Supermarts, with the most bullish analyst valuing it at ₹5,723 and the most bearish at ₹3,100 per share. 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.

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. 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 8.2% annually. So it's pretty clear that Avenue Supermarts is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Avenue Supermarts. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at ₹4,341, 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. 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..

It might also be worth considering whether Avenue Supermarts' debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.