Chalet Hotels Limited Just Missed Earnings - But Analysts Have Updated Their Models
Chalet Hotels Limited (NSE:CHALET) 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. Statutory earnings per share of ₹3.93 unfortunately missed expectations by 20%, although it was encouraging to see revenues of ₹5.2b exceed expectations by 2.6%. Earnings are an important time for investors, as they can track a company's performance, look at what the 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 statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Chalet Hotels' 21 analysts is for revenues of ₹26.9b in 2027. This reflects a notable 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 26% to ₹30.37. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹25.9b and earnings per share (EPS) of ₹28.69 in 2027. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Check out our latest analysis for Chalet Hotels
Despite these upgrades,the analysts have not made any major changes to their price target of ₹1,006, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Chalet Hotels, with the most bullish analyst valuing it at ₹1,150 and the most bearish at ₹850 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Chalet Hotels is an easy business to forecast or the the analysts are all using similar assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Chalet Hotels' revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 35% over the past five years. Compare this to the 105 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 18% per year. So it's pretty clear that, while Chalet Hotels' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Chalet Hotels' earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Chalet Hotels will grow in line with the overall industry. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Chalet Hotels going out to 2029, and you can see them free on our platform here..
You still need to take note of risks, for example - Chalet Hotels has 1 warning sign we think you should be aware of.
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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.