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On Wednesday, Entero Healthcare (ENTERO:IN) experienced a change in stock rating as Jefferies analyst firm downgraded the company from Buy to Hold. Accompanying this downgrade, the price target was also reduced, moving from INR1,650.00 to INR1,320.00. The revision in Entero’s stock outlook came after the company’s fourth-quarter results fell short of Jefferies’ expectations due to lower organic growth.
Entero Healthcare reported earnings that were 6% below Jefferies’ estimates. This performance gap prompted the firm to reassess the company’s future financial prospects. Despite Entero’s recent announcement of acquiring six distributors, which are projected to contribute INR4.8 billion in revenue by the fiscal year 2025, Jefferies found the company’s fiscal year 2026 sales growth guidance of over 30% and EBITDA margin of above 4% to be underwhelming.
The lower-than-anticipated revenue growth and margin profile led to a downward adjustment in earnings projections for Entero. Jefferies anticipates a 15-20% cut in earnings per share (EPS) for the company. The new price target of INR1,320 is based on a 25 times multiple of the projected March 2027 EPS, reflecting a more conservative valuation in light of the revised earnings outlook.
The downgrade to a Hold rating signifies a shift in Jefferies’ perspective on Entero’s stock, suggesting that the firm now views the company’s shares as fairly valued given the current information. This adjustment is a direct response to the company’s latest financial results and its future growth and profitability projections, which have not met the expectations previously set by Jefferies’ analysts.
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