Results: Chorus Aviation Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Last week, you might have seen that Chorus Aviation Inc. (TSE:CHR) released its second-quarter result to the market. The early response was not positive, with shares down 4.3% to CA$20.98 in the past week. Revenues of CA$325m fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of CA$1.24 an impressive 109% ahead of estimates. 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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Following last week's earnings report, Chorus Aviation's seven analysts are forecasting 2025 revenues to be CA$1.36b, approximately in line with the last 12 months. Chorus Aviation is also expected to turn profitable, with statutory earnings of CA$3.14 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CA$1.40b and earnings per share (EPS) of CA$2.40 in 2025. Although the analysts have lowered their revenue forecasts, they've also made a considerable lift to their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

Check out our latest analysis for Chorus Aviation

The consensus has made no major changes to the price target of CA$29.04, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Chorus Aviation analyst has a price target of CA$30.00 per share, while the most pessimistic values it at CA$26.25. This is a very narrow spread of estimates, implying either that Chorus Aviation is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 1.6% annualised decline to the end of 2025. That is a notable change from historical growth of 10% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 12% per year. It's pretty clear that Chorus Aviation's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Chorus Aviation's earnings potential next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. The consensus price target held steady at CA$29.04, 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 estimates - from multiple Chorus Aviation analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Chorus Aviation that 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.