Last week saw the newest annual earnings release from Dalata Hotel Group plc (ISE:DHG), an important milestone in the company's journey to build a stronger business. Dalata Hotel Group reported €429m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of €0.42 beat expectations, being 5.1% higher than what analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
After the latest results, the three analysts covering Dalata Hotel Group are now predicting revenues of €448.6m in 2020. If met, this would reflect a satisfactory 4.5% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to decrease 3.2% to €0.41 in the same period. In the lead-up to this report, analysts had been modelling revenues of €447.7m and earnings per share (EPS) of €0.41 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The consensus price target fell -21% to €6.20, suggesting that analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the annual results. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic Dalata Hotel Group analyst has a price target of €6.20 per share, while the most pessimistic values it at €6.20. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Dalata Hotel Group's performance in recent years. We would highlight that Dalata Hotel Group's revenue growth is expected to slow, with forecast 4.5% increase next year well below the historical 22%p.a. growth over the last five years. By way of comparison, other companies in this market with analyst coverage, are forecast to grow their revenue at 6.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than Dalata Hotel Group.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Dalata Hotel Group's revenues are expected to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by the latest results, leading to a lower estimate of Dalata Hotel Group's future valuation.
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 Dalata Hotel Group going out to 2024, and you can see them free on our platform here..
You can also see whether Dalata Hotel Group is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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