Earnings Release: Here's Why Analysts Cut Their eDreams ODIGEO S.A. (BME:EDR) Price Target To €8.65

There's been a major selloff in eDreams ODIGEO S.A. (BME:EDR) shares in the week since it released its quarterly report, with the stock down 49% to €3.68. Results were roughly in line with estimates, with revenues of €173m and statutory earnings per share of €0.36. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the six analysts covering eDreams ODIGEO are now predicting revenues of €733.0m in 2026. If met, this would reflect a reasonable 6.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to crater 29% to €0.48 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of €722.5m and earnings per share (EPS) of €0.54 in 2026. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

View our latest analysis for eDreams ODIGEO

The average price target fell 24% to €8.65, with reduced earnings forecasts clearly tied to a lower valuation estimate. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values eDreams ODIGEO at €11.50 per share, while the most bearish prices it at €5.40. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that eDreams ODIGEO's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 9.0% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.5% per year. So it's pretty clear that, while eDreams ODIGEO's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for eDreams ODIGEO. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 estimates - from multiple eDreams ODIGEO analysts - going out to 2028, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for eDreams ODIGEO (1 is concerning!) that you need to take into consideration.

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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.