Elior Group SA (EPA:ELIOR) Yearly Results Just Came Out: Here's What Analysts Are Forecasting For This Year

It's been a good week for Elior Group SA (EPA:ELIOR) shareholders, because the company has just released its latest yearly results, and the shares gained 6.1% to €2.67. It was a pretty bad result overall; while revenues were in line with expectations at €4.5b, statutory losses exploded to €2.48 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Our analysis indicates that ELIOR is potentially undervalued!

Taking into account the latest results, the consensus forecast from Elior Group's 15 analysts is for revenues of €4.72b in 2023, which would reflect an okay 6.1% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 96% to €0.098. Before this latest report, the consensus had been expecting revenues of €4.69b and €0.096 per share in losses. So it's pretty clear consensus is mixed on Elior Group after the new consensus numbers; while the analysts held their revenue numbers steady, they also administered a modest increase to per-share loss expectations.

As a result, there was no major change to the consensus price target of €3.03, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. 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 Elior Group analyst has a price target of €4.40 per share, while the most pessimistic values it at €2.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Elior Group's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 6.1% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 10% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.3% annually. So it looks like Elior Group is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no real changes to sales forecasts, with the business still expected to 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.

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 Elior Group going out to 2025, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Elior Group you should be aware of, and 1 of them shouldn't be ignored.

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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.