Revenue Beat: Chorus Aviation Inc. Exceeded Revenue Forecasts By 5.3% And Analysts Are Updating Their Estimates

It's been a good week for Chorus Aviation Inc. (TSE:CHR) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.8% to CA$2.56. It was a workmanlike result, with revenues of CA$351m coming in 5.3% ahead of expectations, and statutory earnings per share of CA$0.33, in line with analyst appraisals. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Chorus Aviation after the latest results.

Check out our latest analysis for Chorus Aviation

Taking into account the latest results, the eight analysts covering Chorus Aviation provided consensus estimates of CA$1.48b revenue in 2024, which would reflect a definite 14% decline over the past 12 months. Per-share earnings are expected to rise 6.5% to CA$0.24. In the lead-up to this report, the analysts had been modelling revenues of CA$1.50b and earnings per share (EPS) of CA$0.28 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at CA$3.31, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values Chorus Aviation at CA$4.05 per share, while the most bearish prices it at CA$2.75. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 26% by the end of 2024. This indicates a significant reduction from annual growth of 8.3% 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 7.0% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Chorus Aviation is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Chorus Aviation's revenue is expected to perform worse than the wider 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Chorus Aviation going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Chorus Aviation (1 is potentially serious!) 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.